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What is Parlay Betting and How does it Work?

Last Updated on May 24, 2020
What is Parlay Betting?

What does it mean to parlay something?

Bet a little, win a lot. That’s the ideal scenario when it comes to gambling as many bettors dream of hitting it big. One way to do that is with a parlay bet, which is a type of play where you need several outcomes to go in your favor. However, if everything goes as planned, you get to cash in big time.

If you’re new to this type of wager and have been wondering what is a parlay, let’s do a deep dive and elaborate on what they are, the math behind them and when it makes sense to bet them.

How does parlay work?

A parlay is a type of bet where you tie together multiple outcomes. You bet on two or more outcomes to come through and if they do, you win. If any of your selections lose, you end up losing your parlay. Let’s take a look at an example:

Three-Game Parlay

  1. Selection 1: Dallas Cowboys
  2. Selection 2: New England Patriots
  3. Selection 3: Seattle Seahawks

Setting aside the odds for each selection, what you’d need here is for Dallas, New England and Seattle to win for you. If they do, you’ve won your three-game parlay. If any of them lose, you lose the entire bet.

Is parlay a good bet?

The pros and cons of parlays are quite simple. The downside is that they are risky. Think about it: you have a 50/50 shot at correctly predicting the result of one game. Now if you add in two, three or four selections, your chances of correctly predicting them all decrease.

The upside of a parlay is that your payout is multiplied. In other words, if you bet on one game and win, you might roughly double your money. However, if you bet on a two- or three-game parlay, you might triple or quadruple your money instead. The more selections you add, the bigger the risk but the bigger the payout.

It’s kind of like swinging for the fences but when you connect and hit a home run, you can really find yourself in the money.

How are parlay odds calculated?

Before we go into explaining how to calculate parlay odds, keep in mind that you’ll rarely have to do this. Most sportsbooks will do the math for you. Once you make your selections on the bet slip, the payout odds will pop up. Alternately, you can easily find a parlay payouts calculator online, which can crunch the numbers for you.

If you want to do the math yourself, here’s how to bet a parlay and calculate the odds:

First off, you’ll need to convert your odds to decimals. If they’re already in decimals, you’re golden. If they’re in American form, there are two formulas. If it’s a negative number, what you’ll want to do is divide 100 by those odds. For example, if the odds are -110, you’ll divide 100 by 110 and add 1 to get 1.9090909. If it’s a positive number, like +235, then you’ll divide that number by 100 and add 1 to get 3.35.

How much does a 2 team parlay pay?

  1. Cowboys -110 (1.909)
  2. Patriots +235 (3.35)

A $100 bet on this parlay would pay (100 x (1.909 x 3.35), which comes out to $639.55. That includes a $539.55 profit as well your original $100 stake.

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What happens when a parlay ties (pushes)?

You’re probably wondering how do parlays work when there is a tie. It’s rare but there is the possibility that one of your outcomes in the parlay ends as a tie (also known as a push). For example, if you picked the Cowboys to win but they ended up tying their game.

In this case, your parlay is simply dropped down by one and those parlay sports betting odds are removed. Let’s say you played an 11-game parlay that would have paid out 150/1 if you won all 11 games. However, in that 11-game parlay, the Cowboys were going to pay 2/1 had they won. If they tied and everything else still won, your parlay would drop down by a game and your new 10 team parlay odds payout 75 times your money.

What are the different types of parlay bets?

There are 4 different kinds of parlay bets: Round Robins, Teaser Bets, Correlated Parlays and Parlay Cards.

Round Robins

These types of parlay bets require a full explanation but this is a type of parlay where you play the permutations of your selections. For example, if you have teams A, B and C in a round robin, you’ll have a parlay of A and B, B and C, C and A, and then all three together.

Teaser Bets

Teaser bets are a type of parlay where you’re able to shift the point spread. For example, in football, a three-team parlay would allow you to move the line by 7 points – in whichever direction you want – but you have to play a parlay. However, keep in mind while you’re getting the benefit of points, you’re losing on the payout side of things as the payouts for teasers are much lower than regular parlays.

Correlated Parlays

This is a type of parlay that you’re not able to bet. It’s essentially when your parlay outcomes are linked and if one outcome comes true, the other is more likely to come true. For example, parlaying a prop for Tom Brady throwing a touchdown with the New England Patriots winning. If they win, he’s likely to play well, so there is a correlation. Sports betting sites are very careful with these and don’t allow anything that’s correlated.

Parlay Cards

Sportsbooks will sometimes offer parlay cards for football where the odds are set and all you have to do is make the amount of selections. For example, a three-team parlay would payout 6-to-1, a seven-team parlay might payout 75-to-1 and so on. These parlay card payouts are always the same because in football, usually the odds on the spread are always -110, so that stays consistent. In reality, you can just create your own parlay with spreads, moneylines or totals – whatever you like – as there isn’t a real advantage to parlay cards. Usually there’s a limit on these but some books will give you 15 team parlay odds – if you want to go that high.

Are parlays a bad bet?

A lot of professional bettors will view parlay gambling as a sucker’s bet simply because the math doesn’t always add up. While we’re not going to geek out on you too much, it’s important to know what the expected value is. Let’s take a three-team parlay as an example.

If you have three NFL selections and each has a 50% chance of winning, then the correct odds at 50% should be 7/1. That would be if you bet your friend $50 on a three-game parlay and the odds were +100 on each game, that football parlay should payout 7/1. However, a sportsbook like Bovada will pay you 6/1 – or even a bit less – because the lines on the three games will be -110 and not +100. In other words, you have a one in seven chance to earn a 6/1 payout. The more games you include, the more of a gap there is between your chances of winning and the payout. When you define parlay bets in this fashion, it illustrates why they’re simply not a winning bet in the long run.

Why bet on parlays?

Right after telling you why the math behind parlays doesn’t add up, we’ll explain why you should bet on them. The reality is not many of us are professional sports bettors and for the most part, having a little action on a Sunday spices things up. It’s more so entertainment than a job. That being the case, parlays are a lot of fun as they give you an opportunity to bet a little and win a lot.

Are there any limits to parlays?

Keep in mind that a lot of sportsbooks, such as BetOnline, have limits on parlays. You’ll often here stories in the news of potential parlay winnings but most sportsbooks will protect themselves after a certain point. Sure, there might be some conjecture on Twitter about a moneyline parlay of huge underdogs that paid out hundreds of thousands had someone predicted the upsets and parlayed them. However, sportsbooks limit their liabilities. Check their terms and conditions but a common number is around $100,000 or $125,000 for online sportsbooks.