Parlays Aren’t Just For Suckers Anymore

A friend passed this article along to me. Said he thought The Sharp Plays audience would enjoy the read. It was one of my favorite articles that he put together so I am happy to post it here. I asked if I could give him credit and he said, no, that’s not why he was passing it along to me. LOL! You’re the man. Thank you again for sharing it with me and I am sure everyone reading will get jiggy with this topic… parlays! Who doesn’t love a good parlay??

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The goal of parlays is to win at a greater frequency than the odds pay. What does this mean? If the parlay pays 6-1 then our goal is to win that parlay at least once out of every five times we play it. In that situation our probability of hitting the parlay is 4-1 but the book is paying us 6-1. That little bit of difference can add up to a huge house edge over both short and long periods of time. As the parlays get larger in the number of teams, our edge expands. I am going to post a link to an article on parlays at the end of this message. I think the article is worth reading for any sports bettor who plays parlays. It is one of my favorite articles on the topic. One section of that article includes a table I am about to get into and it is the crux of why we do parlays when everyone says they are a sucker bet. Yes, they are a sucker bet if you suck at picking bets. 

Let’s just shoot very conservatively and say that as a whole we hit a combined 55% of our selections. I am saying 55% simply for the purposes of calculations already done in the article I am citing (link below). Check out the table below:

Illustration 1:


Parlay payoffs

1st column = Number of bets in parlay

2nd column = Correct odds of winning all bets in parlay
3rd column = Payoffs roughly equal to 4.55% vigorish
4th column = Odds of winning with 55% expectation per bet

size        odds with        standard       odds with
of           50% chance     ’11-10′        55% chance
parlay       per bet            payoff          per bet
2                3 to 1            13 to 5          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        19.9 to 1
6              63 to 1            48 to 1        35.2 to 1
7            127 to 1           92 to 1         65.8 to 1
8            255 to 1         176 to 1       118.5 to 1
9            511 to 1         337 to 1       215.9 to 1
10       1,023 to 1         645 to 1       394.3 to 1
11       2,047 to 1       1,233 to 1       719.4 to 1
12       4,095 to 1       2,356 to 1    1302.8 to 1(Odds are rounded)

The table above assumes the standard parlay payouts for -110 selections (even though this is on point spread parlays the theory directly and without change…except numbers…translates to money line parlays too). The first column is the size of the parlay. The second column is the chance of you hitting the parlay of said size based on winning 50% of your games. OK, let’s stop there. Odds of picking the correct selection in a binary choice is of course 50%. It’s the old heads or tails example. What you should clearly notice at this point in the table is that hitting 50% of your games means that the odds of you hitting a 2 team parlay are 3-1 (aka “true parlay odds”). The problem is, as you see in the next column, the book pays you 13-5 or 2.6-1. You “should” be getting 3-1 and that would be break-even. However the book only gives you 2.6-1 and that .4 difference is the house edge. Here’s where it gets interesting…the final column shows the odds of you hitting that same 2 team parlay but instead of you hitting 50% of your plays, you now hit 55% of your plays. See how the odds change?!? If you hit 55% of your bets now your 2 team parlay pays 2.6-1 on what is a 2.3-1 proposition for you. Now that .3 difference in payout is YOUR edge against the house! So, if you hit 55% of your plays, every time you place a 2 team parlay, the chances of you hitting it are 2.3-1 and the book is paying you 2.6-1! You can also see that as the parlays get larger, your edge against the house is bigger. While a 12 team parlay is wild, the math illustration it provides is excellent for this discussion. With the ability to select 55% winners, the odds of you hitting a 12 team parlay are 1302.8-1. So, you will have to play 1,302.8 parlays before you win 1 based on the assumption that you hit 55% of your selections! That’s a lot of parlays but here’s the catch. After those 1302.8 parlays and you finally win, the book pays you out at 2,356-1! You get an extra 1054-1 in payout over your expected win rate! That’s some serious edge against the house. Dialing it back to a more real life example of a 7 team parlay. A 7 team parlay carries house odds of 92-1. If we hit 55% on our bets, the chances of us hitting that 7 team parlay are 65.8-1….so we are being paid 92-1 on something that we expect to hit once every 67 times we bet it. That’s a bonus of 26-1 above break-even and a major edge in our favor! What kind of edge does this equal? Here’s the calculation shown in Excel format…. =(((65.8/1)-(92/1))/((65.8/1)+1))

You can see where you plug in the true odds and the payout odds in the formula. I did it this way so that you can take this formula and plug in any numbers you like to test out your edge in Excel. The answer to the above equation is -.39222 which means you have a 39.22% edge against the house. Which means, over the long term, betting 7 team parlays as a 55% winning bettor will return $.3922 cents for every $1 of 7 team parlays you put in action! That’s huge when you consider that hitting 56% on straight bets (I use 56% because it is the calculation shown in the article) will provide you a house edge of 6.96%. Of course you put larger money into play on straight bets versus parlays and thereby gain a larger dollar return on a smaller house edge. However you can see what the parlay returns and the edge can be for winning gamblers!

All those calculations (except the straight bet edge calculation) are based on selecting 55% winners long term. I have the article uploaded to the server and you can get it at this link: How to Profit from Parlays. It is in PDF format. Just click the link and it should automatically download to your computer or open on your mobile phone. If you have trouble getting it let me know and I can email you a copy. It’s an article I found a long, long time ago but it is a great read and a definite keeper! I hope you enjoy it!

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I really like the article! I hope it opens your eyes to the great tool that a parlay can be in your betting arsenal. Parlays were forever looked at as sucker bets but if used properly they can be a hell of a weapon! 

Good luck in your action!
~ The Sharp Plays