Understanding Parlays

It has been said that parlays are one of the most misunderstood tools in the betting industry and yet millions are still wagered weekly in this way at online sportsbooks. There are two common ways parlays are played that guarantee the sportsbook a long-term profit.

First is the attempt at a “big win.” Parlaying seven or eight teams at a time, particularly if you side with only favorites, seems like a good idea on paper: After all, a $50 or $100 bet in these conditions can become $100,000 or so if the bettor wins all of his/her picks – but this sort of gambling is only done by professionals who can handle a lot of pressure. (Just imagine winning seven of your eight picks and then waiting for that final game result ... which might just bust your entire parlay on a single freak occurrence.)

One huge problem with parlay betting comes in risk management. For example, after the first seven wins in an eight-team parlay at $66 plus odds of -110 on each team, the final game essentially requires the bettor to gamble $51,200 already earned on winning picks to win $48,800.

In most types of proposition betting, a common strategy for punters is simply to back the favorites. This can seem particularly appealing in NCAA football betting, where many mismatches are scheduled essentially every week. The problem here, however, is one of juice. Though your odds do get better when you parlay, as opposed to betting several games separately, the sportsbook’s juice is taken from every bet.

So why do the professional sports gamblers play parlays at all? Well, essentially they’re only playing “correlated parlays,” i.e. parlays of two wagers in which one bet affects the other positively. An example of this would be betting on an NFL team to cover the pointspread and choosing the over, with the assumption that your chosen team is typically high-scoring. Unfortunately some online sportsbooks no longer allow closely-related proposition bets within a parlay, but so-called “semi-correlated parlays” are also possible, i.e. covering a team to be the first to score combined with that team winning the game on the moneyline.

One strategy used by the pros in parlay betting is to wager on a two- or three-team parlay with favorites in the early games and big bets on the last “leg” of the parlay. This helps prevent situations like the eight-team parlay example above, but “underexposure” is also important. If you lose the first choice on your parlay, you’ll have to find a way to recoup the losses you’ll suffer on the overall parlay.