Parlays

Parlays have been a popular sports betting product for a while now. People like them because they give you a lot of leeway to manipulate the risk profile of bets. If you want to bet a small amount and have a shot for a big score, you can do that with a parlay. If you want to bet big favorites but don’t want to lay a lot to win peanuts, you can do that with a parlay. If you want to have a chance to be in action all weekend with just one or two bets, you can do that as well.

Let’s be clear on what a parlay is. A parlay is just a bet where your winnings on one bet get rolled over into a bet on something else. Say you bet $100 at even money on a morning MLB game and then you plan, if you win that bet, to bet it all (i.e., $200) on an evening MLB game at -200.

If you win the second bet, you have $300 at the end. You have the $100 you started with, the $100 you won on the first game, and the $100 you won (at -200 odds) on the second game.

A parlay bet is a convenient way of wrapping up this plan to roll over winnings onto the next game. So instead of making two bets (one conditional on winning the first bet), you could have placed a two-team parlay in the morning for $100 and it would have paid +200. Win both games, end with $300. Otherwise lose your $100.

Teasers are parlays based on an alternative point spread. Teasers are particularly popular in football, and they let you bet a more generous point spread at commensurately worse odds.

Sportsbooks don’t treat all parlay bets alike. It’s important to understand the house rules surrounding parlays, because they are always different between sportsbooks. In general, however, here’s what you should look for.

First, there are off the board, true odds parlays. Let’s say you want to bet on who will win four different NHL hockey games. Instead of betting each game separately, you either want a huge payoff if all four win, or you want nothing. The teams you want to bet on have the following prices:

-170, -220, +110, and +135

How do you figure out how much this parlay should pay on a $100 bet?

Well, one way is to pretend like you are rolling your winnings over from each bet and find out how much you have at the end.

So you bet $100 at -170 and if you win you collect $158.82 (your original $100 plus $58.82 in winnings).

Then you bet $158.82 at -220 and if you win you collect $231.01.

Then you bet $231.01 at +110 and if you win you collect $485.12.

Finally you bet $485.12 at +135 and if you win you collect $1140.04.

Whew. You’re betting $100 to collect $1140.04. Or $100 to win $1040.04. So the price of the parlay should be +1040.

There’s a somewhat easier way to get the same answer. First, you convert all the bets to their break-even percentages. Then you just multiply the percentages together and convert back to odds.

That’s 0.630 × 0.688 × 0.476 × 0.426 = 0.0879

Convert to decimal odds by taking the reciprocal (which is 11.38) and then back to American odds if you like which would be +1038. (The difference between the two answers is a rounding error.)

Also, if you use decimal odds (like they do in Europe), you can just multiply all the decimal odds together to get the parlay payout. Pretty handy.

The key idea here is that the off the board, true odds parlay pays the break-even percentages of all the bets multiplied together. Below is a chart that summarizes the parlay math on various numbers of legs of 50-50 bets.

No. of Legs Breakeven Percent at +100 Payout at +100 Break-even Percent at -110 Payout at -110 Avg. Vol. Mult.

2 25% +300 27.4% +264 1.96× 3 12.5% +700 14.4% +596 2.87× 4 6.3% +1500 7.5% +1228 3.74× 5 3.1% +3100 3.9% +2436 4.57× 6 1.6% +6300 2.1% +4741 5.36× 7 0.78% +12700 1.1% +9142 6.12× 8 0.39% +25500 0.57% +17545 6.85× 9 0.20% +51100 0.30% +33585 7.54× 10 0.098% 1023/1 0.16% +64208 8.20× 11 0.049% 2047/1 0.081% 1227/1 8.83× 12 0.024% 4095/1 0.043% 2343/1 9.43× 13 0.012% 8191/1 0.022% 4474/1 10.0× 14 0.006% 16383/1 0.012% 8541/1 10.6× 15 0.003% 32767/1 0.006% 16307/1 11.1×

“Never bet parlays. They’re for suckers.”

Honestly, I couldn’t tell you how often I’ve heard that advice. It’s not good advice.

Because while it’s certainly true that “suckers” (just people who bet sports recreationally) love to bet parlays, it doesn’t at all follow logically that it somehow makes them bad bets.

A lot of people think parlays are bad because they hold a lot for sportsbooks. And that’s sort of true—the average three-leg $10 parlay might hold $1.25 on average for the book, or 12.5%.

But the reason the parlay “holds 12.5%” isn’t because parlaying bets together somehow takes good bets and turns them into terrible bets. All a parlay does is blow up the betting volume.

Let’s take a simplified example of a three-leg parlay. The “standard” payout on a three-leg parlay of 50-50 bets is +600.

Assuming you have no ability to pick good bets, and your bets are all independent of one another, your chance of winning each 50-50 bet is about 50%. That gives the chance that you win all three bets as

0.5 × 0.5 × 0.5 = 0.125 or 12.5%

Therefore, if you were to bet this for $10 eight times, on average you would win $60 once and lose $10 seven times for a net loss of $10 on the $80 in action. That makes a “hold” of 12.5% on the parlay.

“Hey,” you might say, “a 12.5% hold sounds pretty bad. After all we’ve been talking about 4% holds. And you warned me about markets with a 6% or 7% hold. And now we’re at 12.5% and you’re going to say something different?”

To understand what’s going on, let’s break the parlay down into its constituent parts. Let’s say you bet a three-leg parlay on

NFL Sunday. You bet one morning game, one afternoon game, and the Sunday Night game. All the individual bets are -110 off the board, and your three-leg parlay pays +600.

You can win or lose each of the bets (let’s ignore pushes for now), so there are eight possible ways the bets could resolve

L-L-L L-L-W L-W-L L-W-W W-L-L W-L-W W-W-L W-W-W

The parlay pays out only if the last one happens—all the others end up losers. But the path to losing is different for each of the parlays.

In the first four cases, the first bet loses, so your total betting volume is $10.

In the next two cases, the first bet wins, so after that game you theoretically have $19.09—the original $10 plus the $9.09 won on the first game. The parlay then demands you bet that entire $19.09 on the next game, which loses, so you get zero.

But in these two cases, your total betting volume is actually $10 + $19.09 = $29.09

In the final two cases, you win the first two bets, so you have even more betting volume. Your $19.09 bet on the second game wins $17.35, so you then bet $19.09 + $17.35 = $36.44 on the final game.

And your total betting volume for these cases is $10 + $19.09 + $36.44 = $65.53

Therefore, your average betting volume for the $10 parlay isn’t really $10. It’s

Volume = 0.5 × $10 + 0.25 × 29.09 + 0.25 × 65.53 = $5 + $7.27 + $16.38 = $28.65

Over the course of the eight bets, you haven’t bet just $80. You’ve actually bet $229.24. And of that $229.24 total bet, you lose $10. Which works out to a 4.4% hold.

Which is roughly the same old hold we’re always looking at on straight bets.

Parlays don’t hold more. They make you bet more money.

Okay before I move on there’s an exception to this concept big enough that I have to mention it. What I said is true for off the board parlays, where the sportsbook calculates the payout exactly as if you simply rolled all your winnings on the previous bet over to the next bet.

But sportsbooks often like to short pay parlays, particularly when you parlay more than three legs of 50-50 bets. They might pay +600 on three-legs, but only +1100 on four-legs and +2000 on five-legs. Paying these legs fairly at -110 for each leg would make the payouts +596, +1229, and +2436 respectively. So yeah, if you’re betting into a short pay parlay like the four- and five-leg examples here, then the parlay does hold more. But not because it’s a parlay. Because the book is short paying you.

Other parlay type bets that often have short pay scales are teasers and parlay cards.

Sportsbooks these days are offering more alternative point spreads as straight bets, and therefore instead of betting a shortpay teaser, you may be better off parlaying the alternative spread bets to get the off the board pricing.

Parlay cards are kind of their own animal (and a very beatable one at that) so we’ll discuss those more in the final part of the book.

But if you avoid getting short paid, parlays are not in any way sucker bets. They’re just a way to increase betting volume. And if you have some winning bets you’d like make, a sneaky way to increase volume can be very handy.