Risk of Ruin Calculator
Calculate the probability of depleting your bankroll before reaching your target profit
Input Parameters
Enter your bankroll details to calculate risk of ruin
Risk Analysis
Understanding Risk of Ruin
What is Risk of Ruin?
Risk of Ruin (RoR) is the probability that you will lose your entire bankroll before achieving your profit target. This is a critical metric for any gambler to understand, as it quantifies the risk you're taking with your money management strategy.
The Formula
For games with a house edge, the Risk of Ruin can be approximated using the gambler's ruin formula:
Where: p = win probability, q = loss probability (1-p), a = bankroll in units, t = target profit in units
Key Factors Affecting Risk
- Bankroll Size: Larger bankroll = lower risk of ruin
- Bet Size: Smaller bets relative to bankroll = lower risk
- House Edge: Lower house edge = lower risk of ruin
- Target Profit: More modest goals = better success probability
Risk Levels
Practical Tips
- Keep your bet size to 1-2% of your bankroll for low risk
- Set realistic profit targets (25-50% of bankroll)
- Choose games with lower house edge to improve your odds
- If RoR is above 25%, consider reducing bet size or target
- Remember: Due to house edge, long-term expected value is negative
Frequently Asked Questions
What is risk of ruin in gambling?
Risk of ruin (RoR) is the probability of losing your entire gambling bankroll before achieving your profit target. It is a mathematical measure derived from the gambler's ruin formula that accounts for your bankroll size, bet size, house edge, and profit target. Understanding your risk of ruin helps you make informed decisions about bankroll management and bet sizing.
How much should I bet relative to my bankroll?
A conservative approach is to bet 1-2% of your bankroll per wager. This keeps your risk of ruin below 5%, giving you the best chance of reaching modest profit targets. Betting 5% per wager increases risk significantly, while betting 10% or more puts you at extreme risk of losing everything. The smaller your bets relative to your bankroll, the longer you can play and the lower your risk of ruin.
What is a safe risk of ruin percentage?
A risk of ruin below 5% is considered conservative and sustainable for recreational gambling. Between 5-25% is moderate risk acceptable for most players. Above 25% is high risk and not recommended for anyone who wants to protect their bankroll. Professional gamblers (like poker players or sports bettors with an edge) typically target a risk of ruin below 1-2%.
How does house edge affect risk of ruin?
House edge directly increases your risk of ruin. A game with a 0.5% house edge (like blackjack with basic strategy) gives you much better odds of reaching your target than a game with a 5% edge (like most slots). Even small differences in house edge compound over hundreds of bets. Lower house edge means your bankroll lasts longer and you have a better chance of hitting your profit target.
Can I reduce my risk of ruin to zero?
No, as long as there is a house edge, you always have some risk of ruin. The house edge ensures that over time, the expected value is negative. You can minimize risk by: using smaller bets (1-2% of bankroll), choosing low house edge games, setting modest profit targets (10-25% of bankroll), and having strict stop-loss discipline. But the only way to guarantee zero risk of ruin is to not gamble at all.
What is the gambler's ruin formula?
The gambler's ruin formula calculates the probability of going broke before reaching a target. For an unfavorable game: RoR = ((q/p)^a - 1) / ((q/p)^(a+t) - 1), where p is win probability, q is loss probability (1-p), a is bankroll in bet units, and t is target profit in bet units. For a fair game (p=q=0.5): RoR = t/(a+t). This formula assumes even-money bets and is an approximation for more complex betting scenarios.