What is a Parlay Bet in Sports Betting?

A parlay is a series of sports bets made on the same ticket, where all bets must win for the wager to be graded a profit. A square bettor looks at this as a benefit for higher payouts with less risk, where a sharp bettor understands this is simply an illusion, as parlays have lower or equal payouts than straight bets and have higher variance. This is a concept many novice bettors fail to understand, so we’ll explain it here in detail.

Why are Parlays Sucker Bets?

In a two team parlay with both bets offered at -110, a winning wager pays 2.6-to-1. We’ll simplify this to show there are four possible outcomes of a two team parlay. If we flip a coin (heads or tails) two times, the possible outcomes are: head/head, tails/head, head/tails, and tails tails. In making a bet one of these four outcomes will be a winner and three of the four outcomes are losers. As you can see, the true odds are 3-to-1 where the sports book pays only 2.6 to 1.

Rather than parlaying a bet, let’s say we bet the games separate instead. We risk $110 to win $100 on the first flip being tails. If it wins we now have $210 we risk to win $190.91 that the next flip is heads. If successful, we’ve now turned our $110 into $400.91 ($290.91 profit). Now if we bet that $110 on a parlay, our potential profit would be $110 x 2.6 = $286. As you can see, we’re getting less profit betting this as a parlay than we would get betting it straight.

First of all, it is never a good idea to vary bet sizes based on riding a rush or chasing a loss. Winning sports bettors are those who control their bankroll and bet each game either with a flat betting amount or a varied betting amount based on edge. Parlays give the square bettor the illusion that each bet is separate, when in fact it is no different than double, tripling, quadrupling, etc. etc. bet size each time a bet is won. Now, even worse is that sports books offer multiple team parlays such as a 3 team parlay, 4 team parlay, even at some sites up to 12 team parlays. The larger the parlay, the more extra juice a sports book charges. Some of these massive bets such as 8 team parlays have 30-40% edge for the house as opposed to the 4-5% edge sportsbooks generally have on single bets.

When do Parlays Make Sense?

There are three situations where parlays make sense from a sharp sports betting stand point. We’ll cover each of those below.

Correlated Parlays: Let’s say you were able to parlay bets of: will it be cloudy today? Yes – with will it rain today? Yes. Well, here is a situation where betting in a parlay would have a higher expectation than betting the outcomes separately, as the events have a correlation. Now in sports betting, there might be times where you feel if the Colts cover the spread the game likely goes over, and it would make sense to parlay both the Colts against the spread and the over on the game’s total. If two wager options are too heavily correlated, a sports book will generally not allow them to be parlayed, but in cases where it is borderline and allowed, this is where correlated parlays come into play.

Clearing Bonus Offers: There are two types of sportsbook bonus offers: cash bonuses and free play credits. The difference in free play credits, versus cash, is that winning bets payout only the winnings (not the stake), as the free bet has now been used and is no longer available. Here you’ll be able to get further use out of this free play by betting it with parlays. In such a case, breaking free play down, where allowed, into many three team parlays would be the most optimal use of your bonus.

Note: The best sports book bonus for parlay bettors is the large bonus option at BetPhoenix.

Circumventing Limits: If you’re a high roller, looking to get action down larger than the sportsbook will allow, than using parlays might be a good way to circumvent betting-limits.

To our knowledge these are the only three cases where parlay betting makes sense over straight wagering. One other potential example is a variation of a parlay called a teaser. While these are generally sucker bets, there are in fact profitable examples. For details, see our page: Teaser Sports Betting.