Ch. 5 - Parlays in Sports Betting
Parlays, also known as multis, are a popular type of bet in sports betting where multiple selections (or legs) are combined into a single bet. For the parlay to win, all selections must be successful. While parlays can offer higher payouts than individual bets, they also come with increased risk, as the failure of just one leg means the entire bet is lost.
Understanding Parlays
A parlay works by essentially rolling your winnings from one leg onto the next, and then those winnings onto the leg after that, and so on. For example, if you win the first leg, the payout (initial stake plus profit) is used as the stake for the second leg. If you win the second leg, those winnings become the stake for the third leg, and so forth.
Example:
Leg 1: You bet $10 on a team with odds of 2.00. If you win, your payout is $20.
Leg 2: The $20 from Leg 1 is now bet on another team at odds of 1.50. If you win, your payout is $30.
Leg 3: The $30 from Leg 2 is now bet on a final team at odds of 2.50. If you win, your payout is $75.
By the end of the parlay, your initial $10 stake has turned into $75, but this only happens if every leg of the parlay wins.
Should You Bet Parlays?
Parlays can be exciting because they offer the potential for a big payout from a small stake. However, they are also very risky because all legs must be successful.
Consider this: If you had time to follow the results of each leg, would you choose to bet the full winnings on each successive leg? Or would you prefer to reassess after each result and possibly make different bets? This is a crucial question to ask yourself because parlays lock you into a set of decisions that may not always be in your best interest.
When Parlays Make Sense
Parlays are most effectively used by professional bettors who are limited in the amount they can bet on a single leg. For example, if a pro bettor wants to place a $500 bet on a particular outcome but is limited to a $100 maximum bet, they might create a parlay with other games they are confident about winning. This allows them to effectively increase their exposure to the desired leg, turning a $100 bet into a $500 bet on the final leg skirts around the rules of being limited to a small bet size.
Live Payouts and Strategies
Many sportsbooks now offer "live payouts" on parlays, allowing you to cash out before all legs have been completed. However, it's important to note that the spreads on these payouts are often large, meaning the expected value (EV) at that moment may not be favourable. In many cases, it's better to ride out the bet rather than take a reduced payout.
As live betting has become more popular, there are also strategies to consider for arbitrage, hedging, or placing live prop bets if you think you have a winning edge. These can help you manage risk or increase your potential return, but they require careful calculation and quick decision-making.
Conclusion
Parlays offer a tempting mix of high risk and high reward, but they require a thoughtful approach. Whether you're a casual bettor looking for a big win or a pro trying to maximise your exposure, understanding when and how to use parlays effectively is crucial. Always consider whether you'd be better off reassessing after each leg or if the parlay structure truly benefits your strategy.
In the next chapter, we'll dive into market-making and how it influences sports betting odds. Stay tuned to learn more about how bookmakers set the lines and how you can find value in the markets.
