Parlay (gambling)
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 it 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. 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
Example 1: NFL
Mulroe places a three-team NFL parlay on the Packers, Bears, and Bengals. If any one of those teams fail to cover the spread, Mulroe loses his parlay bet. But if all three teams beat the spread, Mulroe gets paid $600 for every $100 bet.
If Mulroe pushes on one of those picks, he then has a two-team parlay. If he pushes on two picks, he would then have a straight bet.
Example 2: English Premier League
| Home team | Away team | Home win | Draw | Away win | Result |
|---|---|---|---|---|---|
| Arsenal F.C. | Manchester United F.C. | 1.70 | 3.20 | 4.50 | 0–0 (draw) |
| Chelsea F.C. | Leicester City F.C. | 1.70 | 3.30 | 4.40 | 2–1 (home win) |
| Liverpool F.C. | Tottenham Hotspur F.C. | 1.30 | 4.00 | 8.50 | 3–1 (home win) |
Winning example
Sam wagers £1,000 on Arsenal/Manchester United to draw, Chelsea to win, and Liverpool to win. Sam wins £6,072 as he correctly predicted all three results.
The calculation is: £1,000 × 3.2 × 1.7 × 1.3 = £7,072, less the stake of £1,000.
Losing example
Sam wagers £1,000 on Manchester United to win, Chelsea to win, and Liverpool to win. He loses the wager if either Manchester United, Chelsea, or Liverpool fails to win.
Typical payouts for up to 11 team parlay bet
The following is an example of a traditional Las Vegas Parlay Card, 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 | 13 to 5 | $260 | $360 |
| 3 Team Parlay | 6 to 1 | $600 | $700 |
| 4 Team Parlay | 10 to 1 | $1,000 | $1,100 |
| 5 Team Parlay | 20 to 1 | $2,000 | $2,100 |
| 6 Team Parlay | 40 to 1 | $4,000 | $4,100 |
| 7 Team Parlay | 75 to 1 | $7,500 | $7,600 |
| 8 Team Parlay | 150 to 1 | $15,000 | $15,100 |
| 9 Team Parlay | 300 to 1 | $30,000 | $30,100 |
| 10 Team Parlay | 700 to 1 | $70,000 | $70,100 |
| 11 Team Parlay | 1100 to 1 | $110,000 | $110,100 |
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.
See also
- Full cover bet
- Trixie (bet)
- Each-Way (bet)
- Progressive parlay
- The movie Silver Linings Playbook, in which two characters have a parlay
References
- ↑ "Betting Guides and Terminology – Help - TheGamblingTimes". TheGamblingTimes. Retrieved 2014-01-09.
- ↑ Lappan, Glenda (January 2006), "What Do you Expect: Probability and Expected Value", Prentice Hall