Sports Betting's Hottest Club is: Parlays

Nothing gets talked about more in modern sports betting than the parlay.

I learned about parlays by spying on my uncle’s weekly phone call to his bookie thirty years ago. Today they dominate every sportsbook promotion, and every social media betting video, and they have infiltrated sports bar chatter on every college campus.

These multi-leg monsters are tempting with their big payouts, but are they really worth it?

As the Robin Hood of sports betting, taking from the house and giving to the bettors, I feel obligated to dive into this popular bet type, warn you about the risks, and tell you the one type of parlay I’ll bet every week.

Today we’ll break down the math behind parlays and see how the house stacks the deck in its favor. Spoiler alert: it's not pretty. As always, we’ll review last week’s results (wins!!) and make our bets of the week.

Let’s get after it.

Parlays 101

A parlay is a single bet that links together two or more individual wagers.

To win the parlay, you have to be correct on all included picks (or “legs”). Miss just one leg, and the whole bet loses.

The appeal for a bettor, in contrast to a single bet, is the ability to achieve large payouts from a small stakes wager.

Sometimes those payouts are VERY large: Juice Reel user #13454 won over $7,750 last week from a $5 wager by hitting all 16 legs of this NFL parlay. Crazy, right?

The appeal for the book, in contrast to a single bet, is greater profitability on the same “handle” (dollars wagered) due to a larger house edge on this bet type. When parlays have many legs, that house edge also gets much larger — more on this later.

Let's focus on a simple two-team parlay to explain how this works. For this example, we'll assume you're betting two uncorrelated point spreads at standard -110 odds.

The Math Behind a Two-Team Parlay

When you bet on a single point spread at -110 odds, you're wagering $110 to win $100. This implies a 50% chance of hitting that single bet (ignoring the vig for now).

When you combine two bets into a parlay, the probability of winning both legs is the product of their individual probabilities:

• Leg 1: 50% chance to win

• Leg 2: 50% chance to win

• Parlay probability: 0.5 x 0.5 = 25%

So, with a two-team parlay, you'll win 25% of the time, or 1 out of every 4 attempts on average.

If there were no house edge, you'd want to be paid 3:1 for this parlay because a 25% chance of winning means you need to triple your money when you win in order to break even.

An easy way to visualize this is to consider betting $100 on all four possible parlay combinations of two games, only one combination of which will win:

1.  Team A covers and Team B covers - We win $300

2. Team A covers and Team B doesn’t - We lose $100

3. Team A doesn’t cover and Team B does - We lose $100

4. Team A doesn’t cover and Team B doesn’t cover - We lose $100

$300 in winnings from our first combination minus $300 in losses from the three others nets out to a break even outcome.

Now let’s consider this same scenario, with real sportsbook payouts. The major online sportsbooks pay +264, or 2.64:1 on a two-team parlay. Here’s an example from FanDuel:

In contrast to our prior scenario, $264 in winnings from our winning combination minus $300 in losses from the three others nets out to a loss of $36.

We’ve gone deep on the concept of house edge in the past, but to calculate the house edge of a two-team parlay as a percentage, we divide the $36 loss by the $400 wagered in all four of our parlay combinations and see the following:

$36 / $400 = 0.09 or 9%

This 9% house edge is nearly double the house edge in individual bets, which sit at 4.55%.

Multi-Leg Parlays

The house edge unfortunately gets worse as you add more legs to your parlay — take a look.

Parlays of 8+ legs, which get thrown around all the time on social media, have a house edge of more than 30%!

You gotta be absurdly good at seeing the future to beat those odds.

Sportsbooks love encouraging parlay betting as it boosts their bottom line.

To quantify this, New Jersey sportsbooks average hold (house edge) on parlays in 2024 is 19.7% vs 4.4% on all other bets. That means the book makes more than 4x as much when they take a parlay instead of a straight bet — Yikes!

A Winning Parlay Option

There is a parlay bet I make regularly, with a positive house edge. Here are the details, step by step:

1. Find a promotion offering you a boost of 20% or more on a parlay of 3 legs or fewer. Here is a live example from Fanatics:

2. Ensure a non-boosted, three-leg parlay will pay out +595 (or better). This will usually be true, and here’s a BetRivers example:

3. Apply the promotion to a three-leg parlay of point spreads or totals. This will bring your payout to more than +700, which makes this a positive expectation bet (the house edge is negative)! Here’s an example:

As long as you can find a boost of 20% or more on a three-leg parlay, a promotion I see on the regular, you can have your parlay fun without conceding a massive edge to the book!

I’d love to see you taking advantage of this opportunity, but make sure you do not get tempted to add additional legs, as this will no longer be a bet with positive expected value.

Bet of the Week $$

Last week (Thanksgiving!) we went 3-2, winning our biggest bets and making 1.1 units. I hope you joined in!

We had a near miss at +410 when the Bears former coach flexed his tragic clock management skills, but it was a great week overall.

Since starting the newsletter, bets given out in this section are ahead 4.6 units, at a positive 21% ROI. A $100 bettor would be up $460 making our bets. We’ll update this regularly.

Based on my research, I am making the following bets this week:

• Ohio +3 vs Miami (OH) @-127 on BallyBet for 0.5 units

• Penn State +3.5 vs Oregon @-110 on DraftKings for 0.5 units

• Under 45 in Seattle vs Arizona @-115 on BetMGM for 0.5 units

Given the smaller slate in both college and NFL, I’m risking only half units on a few angles that seem appealing.

If you’d like to parlay all three in boosted fashion as described above, follow your bliss!

Next week we’ll get into the compelling realm of player prop betting.

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