22 thoughts on “Sports Betting 101: Understanding Parlay Betting

  1. I want to make the clear case that parlays are actually NEUTRAL EV compared to straight bets, and are actually extremely +EV for your bets (Bender bets) and insanely -EV for recreational/losing bettors. While I will show that they are equal in EQUITY to regular bets, they are extremely different in VARIANCE compared to straight betting, which is the real reason to avoid them (bankroll management)

    First of all, what is a parlay?

    A parlay, as I define it, is actually a straight bet that also automatically takes the principle and winnings (if it wins) into another bet. I call this a "contract bet".

    Understanding this definition of a parlay will help in understanding why there is actually no extra house advantage or added juice to these bets (thank God)

    I want to give 3 examples of different parlays, one that is neutral EV, one that is negative EV, and one that is plus EV.

    For starters, let's take a look at a neutral EV parlay

    Someone is flipping a coin, and the betting line is EVEN for heads and EVEN for tails. You parlay HEADS with HEADS with TAILS. You bet $1 to win $7 in a "Parlay". The odds of this bet hitting is 1/8 or 1/2 x 1/2 x 1/2. It pays 7:1. As you can see, this parlay is neutral $EV long run, with %700 variance. This 3 leg parlay is actually one small bet, and 2 contract big bets, wrapped into one parlay bet

    The first bet HEADS has a %100 chance of being bet for one unit, and a 1/2 chance of winning. The second bet HEADS has a %50 chance of being bet for 2 units, and a 1/2 chance of winning. The third bet is TAILS and has a %25 chance of being bet, betting 4 units, with a 1/2 chance of winning.

    While a straight bet is one unit bet at EVEN odds, being bet %100 of the time with no future contract bets, a parlay is a contract bet designed to bet the principle and winnings into a second, third, fourth, fifth bet, depending on the parlay size. If all bets in a parlay are paying out even odds with a %50 chance to hit, you will not be paying extra juice for a 4 leg vs a 7 leg… you will just take on more variance (much more)

    Now let's take a look at a profitable/winning parlay (a contract bet containing all +EV bets)

    The site has 2 different bets listed at +200, and they have a %50 chance to win each

    The value of straight betting either bet is pretty easy to calculate, you are making twice as much as you should, $1 wins $2 half the time (pays 2:1)

    The odds of this bet hitting as a 2 leg parlay is 1/9 or 1/3 x 1/3. It pays 8:1 though! Not 2:1. As you can see, this parlay is massively +EV long run, and should only be paying out $3 in winnings (since it hits 1/4 of the time), but the site instead pays out $8 in winnings (1/4 of the time).

    In other words, for every $1 you bet for this parlay, you will make $8 %25 of the time. This means the value of the parlay is $2 per $1 bet on the parlays vs $2 per $1 bet on betting them straight! Exactly the same as straight betting!

    Now that we know that parlays have the same EQUITY as betting them straight, does that mean we should bet parlays?

    Wellllllll no, not necessarily. If you want to take on more variance for some reason, parlays are certainly great. If you want to take on less variance, parlays are really really really really really really bad.

    Let's look at the PROs and CONs of parlays


    1) More variance.

    A great way to increase your risk of ruin is doing a bunch of 4-8 leg parlays. Even if all your bets are profitable on their own, you will end up going broke (and occasionally winning the lottery) every time. A great way to make your bankroll last is to only straight bet, or maybe go for some small $ amount 2 leg round robins.

    2) More losing.

    While parlays increase variance, which is bad for your bankroll, they also generate more losing days. If you are psychologically affected by losses, parlays are a great way to lose every time. While you aren't losing $EV with parlays, you will certainly lose way more bets than you win. If this is an issue, stay away from parlays!

    3) No extra bonus for rollover contribution percentage (which also plays as a rollover tax). A $1 two leg parlay with a couple dogs that wins $10 only counts as a $1 bet whether it wins or loses when rolling over a bonus (that may have 30x rollover). A $1 straight bet, followed by a big manual straight bet with the principle and winnings of that first bet to a second bet would technically count as two different bets for the rollover (the second one being bigger), while paying out the exact same amount of money as the parlay. If you are on a bonus, strongly consider straight betting everything.


    1) Getting more money in against the house.

    Most books have caps on how much they will let you bet. For example, ACR only allows a $400 bet on a -200 line for some sports! Incredibly though, they allow you to parlay it for $400 also. If you see three different winning bets in a given day on ACR, you can straight bet 400 on the -200 line, and also get another 400 in, in the form of a 2 leg parlay, with a different bet that you also think is profitable. In the case of you Bender, you may be capped at $5,000 per bet or something, but you can easily get in $10,000 on that bet by parlaying (contract betting) a different profitable bet you have for that day on the site

    2) More reward points. Right now on Bovada, a $1 straight bet earns 2 reward points, while a 2 leg parlay bet gives 15 points (should be 5-10)! Incredibly, round robin parlays which are essentially the exact same thing as a parlay, give a whopping 25 points per $1 bet. That means that every $1000 you bet, you will win your win rate plus $2 or so for straight bets, but $5-10 extra per $1000 bet if you bet in the form of 2-3 leg parlays. These points actually tip the scales a bit, making parlays more profitable mathematically than straight bets for a site like Bovada

    3) Good cover. Some sites ban people that win too much, but when a site sees someone blasting off on parlays, it makes the winning bettor seem like a recreational bettor, since most pros take the lower variance route in straight betting

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