You are not going to lose 1000 plays in a row and, even if you did, Kelly strategy would limit your maximum loss to your starting bankroll. The reason is that with Kelly strategy we routinely, ideally after every bet, readjust the bet size to the Kelly recommendation which in this case would be about 2% of bankroll.
And a 1.7% ROI is phenomenal for sports betting. It is NOT comparable to something like a treasury bond since the ROI is per bet not per year and you can put a great deal of money in play with a fairly small bankroll while leveraging something like Kelly strategy to mitigate your risk and maximize your expected return. The bettors who get into trouble tend to be way MORE than the Kelly recommendation and end up quickly depleting their bankroll. Classic example is a guy who has $1000 and bets $200 per play. Obviously risk of ruin is enormous - one small down streak wipes him out.