The Truth About Parlays

Happy Thanksgiving! Before I talk turkey and parlays with you, I’d like to respond to an email I received with regards to last week’s column on money management:

You recommend keeping your bets a similar size, but the service I use puts out plays that range from one star to five stars. They tell me that a five star bet is worth so much more. Shouldn’t I be following their advice?

I’ve been asked this question before…a lot. Handicappers that use a star system typically suggest playing one unit per star. A one-star play should be bet for one unit, two-stars for two units, etc. with a unit being 2-3% of your bankroll. Thus, if you have $5000 to bet, you would bet $100 per unit, $100 on a 1-star play, and $500 on a 5-star play. Ignore those who advocate 10-star or 50-star games or sell ‘locks’ – locks are for doors, not sports betting.

That means your biggest bets are five times your smallest and would be as much as 15% of your bankroll, so be careful there. I suggest you monitor the different success rates for the one, two, three, four and five star plays. If the small unit plays are not good enough to get a big bet, maybe they aren’t good enough to be bet at all.

Now, on to parlays.

Understanding How Parlays Work

Also known as a combo, a parlay is a selection of two or more wagering outcomes, in which the odds for the payouts increase with the number of teams (sides/totals) chosen; the more teams you choose to parlay, the better the payout. You can combine different sports, pointspreads and moneylines in win/loss and/or totals betting.

In all honesty it’s hard for me, on behalf of players, to recommend parlays because of the high hold percentage given to the house, but I can understand why players like betting parlays – it’s all about the big payoffs!

Sometimes the smallest investments can turn into the greatest rewards, said one winner.

In fact, we’ve had a few big winners recently. On August 23, 2004, Matt from Manhattan Beach won $49,998.00 with a wager of $51.24 on a 10-team baseball parlay. Then on November 1, 2004, Troy from Missouri wagered $5 on a 12-team parlay and won $6,467. Rishi from California wagered $10 on a 12-team parlay and won $21,101 the same day.

Allow me to explain the math behind fixed odds parlay payouts. (I can hear the collective groan now, but it really isn’t that hard.) Fixed odds parlays involve football and basketball spreads and totals at standard odds (-110). Rather than having to calculate the odds of every parlay uniquely, Vegas books (and now offshore) ones have instead derived a standard set of fixed odds payoffs for such parlays.

Let’s look at a simple 2-team parlay using a real example, the early game this Thanksgiving has Chicago at Dallas. The line is Dallas -3.5 and the total is 36. Parlaying a side and the total gives us four combinations:

a) Dallas -3.5 and Over 36
b) Dallas -3.5 and Under 36
c) Chicago +3.5 and Over 36
d) Chicago +3.5 and Under 36

The odds of any one of these plays being a winner are 1-in-4 so the actual odds would be 3/1. In actual fact, most books pay 2.6/1 (you see it commonly written as 13/5) assuming all bets are at stand payoffs (-110).

To clearly illustrate how this works for the house let’s assume four different players each bet exactly $100 on a different one of the four possible parlays for this game and Parlay D is the winner. The house would collect $100 from Allan, Bob and Charlie (who bet A, B, and C respectively) and would pay the $260 to David (who had the winning play on Parlay D). David would also get his risk money back. In total the house would collect $400 in handle, collect $300 and pay out $260 for a net gain of $40, which is a 10% theoretical hold (300-260=40, 40/400=10%).

For 3-team parlays it is essentially the same calculation except there are 8 possible outcomes and the payoff is 6-1. With $100 bets on each outcome, books would collect $700 from the losing plays and pay out $600 to the winner for a net profit of $100 on $800 in handle for a 12.5% theoretical hold. Below is a chart using standard Las Vegas payouts showing the actual odds, Las Vegas payout and the house vigorish.

# of Teams
Las VegasPayout

It doesn’t take a rocket scientist to see that bigger than 3-team parlays should do very well for books but in fact we don’t hold this much. It is hard to split the action on one game and it is impossible to evenly split the action in parlays involving multiple games. We often see the same picks over and over in different parlays and so the higher juice is simply to cover the risk of having to pay out the occasional very large bet. Any bookmaker that has had a good weekend ruined by a big 1000/1 payout on a parlay knows the feeling and would argue that the juice isn’t high enough! Remember that these odds are just the Vegas standard and that there a wide range of different payout tables.

Benefits to the Bettor

Now that the math is out of the way, let’s talk a little about how parlays can benefit the bettor. First off, there are always certain games where you hear people say things like If they can keep the score low, they have a chance at winning, or they need to score at least 30 points to really have a shot. Certain games have a slight correlation between the spread and total and betting these situations in a parlay can be a big advantage to bettors.

This is especially true of very large spreads. On a college football game where the spread is -40 and the total is 51, it is very difficult for the favorite to cover and have the total still be Under. Granted, 42-0 or 49-0 gets it done, but if the dog even scores just a Field Goal the favorite must score 44 points to cover, but cannot score more than 48 points or the total goes over, a very limited range to win such a parlay. You can virtually remove this option from the 4 possible parlays and are now left with a situation where the payoff is 2.6/1 for just 2/1 odds against, a +30% advantage.

In fact, if you play favorite/over or dog/under in situations where the spread is 40% or more of the total, you should come out ahead. These are known as correlated parlays and many books won’t take them for obvious reasons but it never hurts to ask.

A Quick Note on Last Week’s Action

It was a good weekend for bettors, mostly because it wasn’t a great weekend for home dogs (0-7-1 ATS). In other words, it was probably a great weekend to not follow my advice!

Anyways, now that the holidays have officially kicked off, however, we can all look forward to lots of great football and plenty of turkey leftovers! Hope you and yours have a safe and happy holiday.

Good luck with your wagers!

I always welcome comments, questions and suggestions via email at
Rob Gillespie is President of Bodog Sportsbook & Casino