You will see some sports handicappers out there who think that parlays are sucker bets and should never be used by the bettor. With all due respect to my peers, I’m going to disagree with that statement and show how value bettors can actually use parlays as a tool to win more money. However, it should be noted that for the average bettor who does not win a high percentage of his bets parlays can be disastrous for a bankroll.
Let’s take a look at what I would call the average bettor, which is someone betting without an advantage. If this player is using a -110 line set book and his sports picks are no better than a coin flip then on straight wagers his loss expectation is 4.55%. The standard -110 line set book will have parlay odds of 13/5 on two-teamers and 6/1 on three-team parlays. If our average bettor bets parlays instead of straight bets then his chances of winning a two-team parlay should be 25% (50% x 50%) and his chances of winning a three-teamer would be 12.5% (50% x 50% x 50%). His loss expectations can then be figured:
Two-team parlay: 25% (chance of winning the parlay) x 13/5 (return on a win) then subtract 75% (chance of losing the parlay) x 1 (amount lost on an unsuccessful wager) to come up with a 10% loss expectation.
Three-team parlay: 12.5% x 6 – 87.5% x 1 for a 12.5% loss.
You can see with the numbers above that the average bettor is much worse off betting on parlays than doing straight wagers. This is where the analysis stops for most handicappers out there and most sports bettors. Truthfully, it probably should since they are not going to be able to hit more than 50% of their wagers anyway.
But what about sports bettors who have an advantage? Expert sports handicappers and professional gamblers are able to win more than 52.4% of their wagers and many are able to achieve results of 55% or better over the course of a season. Let’s take a look at the profit/loss expectation for a bettor who wins 55% of their bets:
Straight wagers: 55% (number of wins) x 100 + 45% x -110 for 5% profit expectation
Two-team parlays: First figure out the winning percentage of the two-teamer – 55% (win percentage on each game of the parlay) x 55% = 30.25%. So our formula is now 30.25% x 13/5 (return on a win) then subtract 69.75% (chance of losing the parlay) x 1 (loss on a losing parlay) to get a profit expectation of 8.9%.
Three-team parlays: Odds of winning the three-teamer: 55% x 55% x 55% = 16.6375%. The formula is thus 16.6375% x 6 (return on winning parlay) subtract 83.3625% x 1 to get a profit expectation of 16.463%.
There you have it. If you are the kind of better that can hit 55% of your bets then parlays will give you a much higher profit expectation than if you bet the games straight up. In theory your expectation should only increase as you increase the number of teams in your parlay, however, in doing so you drastically increase your risk. An extreme example would be betting a 25-team parlay with fair parlay odds of 10,487,336/1. A 55% bettor should have a profit expectation of 238.64% but you have to look at the 0.0000323% chance of you actually winning one of these. One thing to note is that house edge on parlays at your book.
Even if you aren’t a 55% bettor, parlays can still be advantageous to you if you use correlated bets. If style of play will dictate the winner of a game then taking the slower paced team to win plus going with the under should give you better odds than if the side and total were independent events.