One of the most common types of wagers is the parlay. For those unfamiliar, a parlay is a bet consisting of two or more selections, all of which must win for you to win. If your parlay consists of five different bets, there is no difference between going 4-1 and 0-5. Unless you go 5-0, you lose.
It goes without saying that parlays are far more difficult to win than straight bets and the more selections you have in a parlay, the less likely you are to win. The advantage to winning, though, is that the payout is significantly greater than a standard straight bet. If you bet $100 on a team at -110, you are risking $110 to win $100. If you bet $100 on a five-team parlay with every team at -110, you are risking $100 to win about $2,400. Parlays are the quintessential risk/reward plays, which is what makes them so popular. People are attracted to the idea of risking a little (relatively speaking) and winning a lot.
A parlay is similar to a teaser in that you have to win multiple individual wagers to win your bet, but that’s where the similarities end. In a teaser, your odds of winning each individual wager are greater because you are getting anywhere from 4-13 extra points added to the point spread. Since it is easier to win teasers, the payout is typically near even money, give or take a few cents on either side (typically ranging from -150 to +150), whereas the payout on a parlay is significantly greater.
With that being said, let’s take a look at the actual odds of winning a parlay and understand why it is not something you should bet very often. For starters, Vegas odds are worse than offshore odds. Two team parlays payout 13/5 and three team parlays pay out 6/1 on both. Once you get to four teams, the odds diverge. Vegas pays out 10/1 while offshore books pay out 12/1. And at five teams, it is 20/1 compared to 24/1. The disparity continues to increase as you add teams. Where you place your bets matters.
More problematic than Vegas vs. offshore books is that you aren’t getting anywhere near the true odds. Assuming a standard -110 bet with a 50% chance of winning, the actual odds of winning a two-team parlay are 3/1. The actual odds of winning a three-team parlay are 7/1, four-team parlay 15/1, and five team parlay 31/1. Many sites allow a maximum of five teams in a parlay, so let’s analyze that one. Bettors will unsurprisingly be enticed by the potential of a 20/1 or even a 24/1 payout. All they have to do is win five bets! But even when they win, which is rare, they still lose. Receiving 24/1 on your money is substantially different than the true odds of 31/1.
The edge for the books on parlays is significant. On a standard -110 wager, the house edge is 4.5%. Even on a two-team parlay, the house edge is already up to 10%. By the time you get to five teams in a parlay, the house edge has increased to nearly 35%. You are sacrificing a ton of value to try and “win big” quickly. It can admittedly be difficult to ignore the possibility of receiving 20/1 on your money and the human brain is very good at deluding itself into dismissing undeniable concepts. You must overcome that desire and realize that placing five straight bets is more profitable in the long run than a five-team parlay.
If you are intent upon betting a parlay, you should try and limit yourself to two team parlays, as they give the house the smallest edge and are easiest to win. You can also use parlays to get around bet limits. For example, if you can only bet $500 per game and you’ve already put $500 on the Eagles -4, you can parlay the Eagles -4 with the money line on a heavy favorite that is highly likely to win in order to get more money on Eagles -4 (of course, every once in a while the big favorite loses and this backfires, but that’s always a risk when gambling).
When I bet parlays, I limit them to money lines, usually big favorites. If I feel a team listed at, say, -500, will actually win that game nine out of 10 times, then there’s actually value in that line. By parlaying multiple big favorites I see value in, I can avoid risking significantly more money than I can afford while combating the inherently poor odds on a parlay. In the long run, it is still not profitable, but it is better than the standard type of parlay with a bunch of -110 teams that is unlikely to win.
As always, wager responsibly and never bet more than you can afford to lose.
Jason Katz is a featured writer at BettingPros. For more from Jason, check out his archive.