Parlay (gambling)

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A parlay, accumulator, or combo bet is a single bet that links together two or more individual wagers and is dependent on all of those wagers winning together. The benefit of the parlay is that there are much higher payoffs than placing each individual bet separately, since the difficulty of hitting all of them is much higher. If any of the bets in the parlay lose, the entire parlay loses. If any of the plays in the parlay ties, or "pushes", the parlay reverts to a lower number of teams with the odds reducing accordingly.[1]

Odds and payout

Parlay bets are paid out at odds higher than the typical single game bet, but still below the "true" odds. For instance, a common 2-team NFL parlay generally has a payout of 2.6:1 if both picks are correct.[citation needed] In reality, however, if one assumes that each single game bet is a coin flip and would be expected to pay out at 1:1, the true payout should instead be 3:1, a substantial difference.

Examples

Typical payouts for up to 11 team parlay bet

The following is an example of a traditional Las Vegas Parlay Card at William Hill Sports Book, which shows the typical payouts for an up to 11 team parlay bet (amount won is assuming \$100 is bet):

Number Odds Amount won Payout
2 Team Parlay 2.6 to 1 \$260 \$360
3 Team Parlay 6.5 to 1 \$650 \$750
4 Team Parlay 13 to 1 \$1,300 \$1,400
5 Team Parlay 25 to 1 \$2,500 \$2,600
6 Team Parlay 50 to 1 \$5,000 \$5,100
7 Team Parlay 100 to 1 \$10,000 \$10,100
8 Team Parlay 180 to 1 \$18,000 \$18,100
9 Team Parlay 400 to 1 \$40,000 \$40,100
10 Team Parlay 825 to 1 \$82,500 \$82,600
11 Team Parlay 1500 to 1 \$150,000 \$150,100

Profitability of parlays in sports betting

Many gamblers have mixed feelings as to whether or not parlays are a wise play. The best way to analyze if they are profitable in the long term is by calculating the expected value. The formula for expected value[2] is: E[X] = x1p1 + x2p2 + x3p3…xkpk . Since the probability of all possible events will add up to 1 this can also be looked at as the weighted average of the event. The table below represents odds.

Column 1 = number of individual bets in the parlay

Column 2 = correct odds of winning with 50% chance of winning each individual bet

Column 3 = odds payout of parlay at the sportsbook

Column 4 = correct odds of winning parlay with 55% chance of winning each individual bet

Number of individual bets Correct odds at 50% Odds payout at sportsbook Correct odds of winning parlay at 55%
2 3 to 1 2.6 to 1 2.3 to 1
3 7 to 1 6 to 1 5.0 to 1
4 15 to 1 12 to 1 9.9 to 1
5 31 to 1 24 to 1 18.9 to 1
6 63 to 1 48 to 1 35.1 to 1
7 127 to 1 92 to 1 64.7 to 1
8 255 to 1 176 to 1 118.4 to 1
9 511 to 1 337 to 1 216.1 to 1
10 1,023 to 1 645 to 1 393.8 to 1
11 2,047 to 1 1,233 to 1 716.8 to 1

The table illustrates that with even a 55% chance of winning each individual bet parlays are profitable in the long term. Compare the expected value you receive on an individual bet with a 55% chance of winning. (.55)-(.45) = .1 (ten cents won for every dollar bet on average) to the expected return on the 11 game parlay ((1233/716.8)-1)=.72 (72 cents won for every dollar bet on average). In this case a parlay has much higher expected returns than individual bets but unfortunately greatly increased variance in outcomes.