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Understanding Parlays

Written by Jimmy Boyd

This article is meant to help further your sports betting knowledge by understanding parlays and how they work. Parlay bets, also known as combos, are a selection of two or more wagering outcomes in which the odds for the payout increase with the number of bets that you choose. The more teams that you parlay together then the higher the payout. You can combine almost anything, including money lines, sides, and totals.

As one of the best sports handicapping services around, we don’t like to recommend parlays to visitors because their is a very high hold percentage for the house. However, we know that most people get roped into making these wagers since there is such a big payoff. For instance, I’ve seen someone who won over $50,000 on a $50 10-team parlay during the baseball season, or the $5 12-team parlay that turns into almost $6,500, or even a $10 12-team parlay that paid off a whopping $21,000.

If you think that you want to take on some added risk in order get the bigger payoff then at least read up on how the fixed odds work math-wise. For the most part parlays on football and basketball involve the standard -110 lines, so instead of having to calculate the odds on each parlay, there are fixed payoffs for each parlay bet. Let’s look at an example. The line will be Arizona -3.5 against New York with a total of 36 so you will have four different combos to choose from:

Arizona -3.5 and over 36
New York +3.5 and over 36
Arizona -3.5 and under 36
New York +3.5 and under 36

The odds of any of these parlays being a winner are 1-in-4 so the actual odds are 3/1, but the sportsbooks pay either 13/5 or 5/2 assuming all bets are the standard -110. So if four players bet on each different outcome, there will be one winner at $260 and three $100 losers for a $300 total. That means there is a net gain of $40, which is a 10% hold for the book. The same thing basically works out for a 3-teamer, with eight different possible outcomes and a 6-1 payoff. One guy wins $600 and the other seven would lose $100 for a $700 total and a 12.5% hold for the books. Take a look at the payouts and house edge below:

# of Teams	Actual Odds	Las Vegas Payout	House Edge
2	3/1	2.6/1	10.00%
3	7/1	6/1	12.50%
4	15/1	10/1	31.25%
5	31/1	20/1	34.38%
6	63/1	40/1	35.94%
7	127/1	75/1	40.63%
8	255/1	150/1	41.02%
9	511/1	300/1	41.21%
10	1027/1	700/1	31.54%

It’s pretty apparent if you look above that anything above a 3-team parlay does very well for the books, but the truth is the hold isn’t really all that high. It’s hard to split the action on the parlays since so many teams are involved. The books typically see the same picks over and over again in different parlays so they really need the higher house edge to cover the risk of having to cover out some very high payoffs. It’s easy to see how a bookie can have a very good weekend ruined by one person who hits a large 700/1 payout.

Benefits

One time that you could benefit from parlays are when you see a team that is going to try to keep the score low in order to have a chance to win. There are games that have a certain correlation between the spread and the total and these are the times that parlays can be a big benefit to the bettor. Here at Locksmith Sports we rarely play parlays, but when we do most of the time they are high juice baseball games and on the side and total in the same game. This is especially true of large spreads, when taking a look at the college football odds you may see a game with a spread of -40 and a total of 51. It’s very tough for the favorite to cover this game and still see the game land under the total, granted it happens, but it is very tough to do so. So without one of these options (favorite and the under) then the real payoff is nearly 2/1, which is a 30% advantage for the bettor. A good rule of thumb is to play the over when the spread is 40% or more of the total and you like the favorite, or vice versa. A lot of books won’t even take this kind of action, called a correlated parlay.

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