Why parlays are big business for sports betting

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Parlays – propositions that combine several bets, or “legs”, into one more extended bet in the hope of turning a little money into a lot – have always been popular with the public. Regulated sportsbooks in the United States often promote such bets, as bettors know that the edge lies largely with the house. (If even an individual round does not pass, the whole bet loses.)

According to the Center for Gaming Research at the University of Nevada, sportsbooks in the state earned an average of 5.7 cents on every dollar wagered on football in 2021. They earned 5.5 cents on every dollar wagered on basketball -ball and 4.8 cents on every dollar wagered on baseball.

The talks, however, resulted in a windfall of 32.1 cents per dollar, illustrating why much of the advertising, promotional odds increases and other sports betting marketing incentives now revolve around parlays. DraftKings CEO Jason Robins told attendees at Goldman Sachs’ June travel and leisure conference that his organization’s focus on parlays would intensify further.

“What we do is try to intelligently eliminate the sudden action or limit [it] at least…and also making sure we have a high parlay mix because people like that,” Robins said.

Sports betting does so well on betting because each of the individual bets must win to cash out the bet. If you lose one, the total bet is considered a loss. The probability of the bet being cashed out depends on the probability of each included bet. If you have two bets that are each +100 – bet $100 to win $100 – then the bet has about a 25% chance of winning. If those bets are each -110 (bet $110 to win $100), the odds improve to 27%, but the payout will also be slightly lower to reflect those odds.

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Where many bettors get into trouble is chasing high scores with multi-legged bets that often seem like a sure thing. A six leg bet in which each leg has odds of -233 – implying a 70% chance of winning each leg – may seem like a relatively safe bet. In reality, he only has about a 12% chance of winning.

And in single play betting – an increasingly popular option in which punters must select multiple bets from in the same game – you could be penalized for choosing bets that are correlated, meaning there is a positive relationship between the bets that makes them more likely to succeed.

Here is an example from this baseball season. Let’s say we wanted to create a unique game on FanDuel for a June game between the New York Mets and the Milwaukee Brewers. We want to support eight races in total, offered at -110 odds. We also want to add a Pete Alonso home run at +310 odds, giving us a single match bet with two bets that will pay +485.

But these two events are correlated. More homers generally mean more runs scored. If instead we change the total bet to below eight runs, also at -110, but keep Alonso’s home run prop – giving us two uncorrelated events in the same game – the potential return is increased up to +980 despite the odds for each bet being exactly the same (+310 and -110). The fair value of this bet, considering the prices of both bets, is around +680. In other words, the correlated bet vastly underpays bettors, while the uncorrelated bet overpays. Not all sportsbooks penalize you in this way, so be sure to compare prices at different outlets.

Single game parlays may also have different rules, even for the same bet. On DraftKings, for example, if you place a straight bet on a player getting a hit in an MLB game, they must start and record at least one board appearance for the bet to be live. If that same bet is part of a single game, the player only needs one plate appearance. In other words, he could pinch the hit later in the game for an at-bat and the bet would be considered live, a clear disadvantage to the bettor.

There are also situations where the prizes themselves are different for the same bet, depending on whether it is used in a single play bet or not. Here is the exact same game offered at DraftKings both as straight bets (top) and as a single game (bottom). There are different prizes for the money line, run line and over/under totals, although they are the same bets. (Not all differences are in a disadvantageous direction for bettors.)

Then there are the odds “boost” sports betting offers, many of which come via two or three leg parlays. Caesars this season offered to “boost” a two-legged parlay — which required Bryce Harper and Jorge Soler to each hit a home run in a game — to +1200, a juicy number. This same bet, however, could be obtained at odds of +1846 on FanDuel using a single match bet with no boost. In other words, sportsbooks are selling a product – so don’t assume that their enthusiasm for betting specials necessarily means they have value for punters.

Finally, beware of promoted parlays. These usually involve a few chained favorites to give the illusion of a shortcut to a winning bet; clearly, this is far from the case. DraftKings promoted a parlay during the baseball season that included the Houston Astros winning (-180), the Atlanta Braves winning (-280) and no runs scored in the first inning of a Colorado Rockies-Arizona Diamondbacks game (-125 ). The promoted parlay offered odds of +280, but the fair value price – based on bookmaker Pinnacle, once you remove the vig – was +320. On paper, three negative odds bets – which each should be favored to win – look like a promising 3-0 ticket, but the calculations (and reality) are very different. Even if you had three overwhelming favorites at -250 each – implying a 71% win rate per leg – you would still only have a 36% chance of going 3-0.

Are parlays a big winner for the house? Absolutely. Does that mean you should avoid them altogether? No. As with any bet, if you think you have an advantage, you should bet accordingly. If you think you have an advantage in multiple games, it makes sense to combine them for increased payout.

But by impulsively betting bets every turn, you will enrich the house more often than your own bankroll.

Illustration by Lily LK for The Washington Post.

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