How Do Parlays Work In Sports Betting?
Whether you're a die-hard Super Bowl bettor, or your state only just legalized sports betting, you might be wondering what, exactly, a parlay is. To put it simply, a parlay bet is when a bettor combines two (or more) bets into a single wager. These kinds of bets can also be referred to as "accumulators" or "multis," depending on the sportsbook or platform you're using. In order for the bettor to win a parlay bet, they must win every smaller bet that has been bundled into the overall wager. Even if you only have one loss out of many wins, you still lose the wager. This is what makes parlay bets not only riskier but also potentially more lucrative. The more small bets you include in your parlay wager, the higher the potential payout, should your wager win.
The biggest problem with parlay bets is the high frequency of losing. Since the odds get smaller with each added bet bundled into a wager, bettors are losing big in their attempt to win big. 2023 data from the state of Illinois showed that parlays accounted for more than 60% of the state's total online sports bets each month. These parlays also accounted for more than 27% of all of the total money wagered, so it's safe to say parlays are quite popular, even if they're rarely successful for the bettor. According to an analysis from Barron's, gambling companies have a significantly higher win margin on parlay bets (20%) compared to standard bets on single outcomes (5%).
Parlay limitations
While just about any market includes parlay bets, there are specific rules to be aware of if you decide to play them. For starters, you generally can't bet on something known as a "correlated" parlay. This means you can't place a parlay bet that might make the outcome of another parlay bet more likely to happen. Essentially, if your two bets are somehow tied together, your sportsbook or platform probably won't accept the bet. A good example would be attempting to bet on the moneyline (who will win) and the spread (margin of victory or score) of the same game. The exact rules for how related individual bets can be before being considered correlated depends on your individual sportsbook, so it's important to do some research. Another important thing to remember is not to attempt parlays that include first-half (or first-quarter) information with full game odds or totals.
It's also worth mentioning that as of March 2024, the National Collegiate Athletic Association announced that it's attempting to have U.S. states ban parlay bets on all collegiate-level events. NCAA President Charlie Baker posted a statement on social media, saying, "Sports betting issues are on the rise across the country with prop bets continuing to threaten the integrity of competition and leading to student-athletes getting harassed. The NCAA has been working with states to deal with these threats and many are responding by banning college prop bets." Since parlays are a prominent type of prop bet, you could find yourself unable to bet on college sports in this way going forward.
Parlay downsides
Parlay bets are considered by many to be one of the biggest mistakes new users can make on sports betting apps, with many avid bettors feeling like they aren't worth it. With this in mind, you should approach this bet type cautiously. Not only do they provide the house (or rather, the sportsbook or platform you're using) with a significant advantage in terms of odds, but they also have more complicated math involved for those attempting to determine odds. This makes them a more complicated bet that's less accessible to casual bettors, despite their popularity among novice players.
According to the University of Nevada's Center for Gaming Research, Nevada's sportsbooks earned, on average, 5.7 cents on every dollar that was wagered through traditional bets on football in 2021. However, these same sportsbooks earned 32.1 cents on every dollar wagered on parlay bets. By these numbers, it's no wonder sports betting apps are placing a much bigger focus on parlays.
In 2022, the CEO of DraftKings told investors, "We've been pushing [a high parlay mix] since we migrated [onto DraftKings' new platform]. It's only been eight or nine months, but every quarter the parlay mix as a percentage of total bet mix goes up." In 2023, DraftKings even unveiled a new Progressive Parlay product, further encouraging bettors to try their hand at parlay bets. While its strategy has been successful for it (with the company posting a 44% growth in revenue as of the end of 2023) it's not necessarily good for bettors.