Online sports betting these days is a multi-billion dollar business that covers a wide range of betting options at any number of offshore sportsbooks operating online. While the majority of the sports betting action that is placed is on straight bets on the pointspread and total line for the games, there are a series of additional betting options that all start with the basic premise of a parlay.
Video: Betting Parlays with Steve Stevens
A sports betting parlay is sometimes referred to as an ‘exotic bet’ since it falls out of the realm of those traditional straight bets, but what it really is in its most basic form is a grouping of more than one straight bet into a single betting ticket.
For example, if you would normally bet three NFL games during the course of a typical week, you could actually group those three individual bets into one parlay bet in an effort to generate a much greater return on your investment.
If you bet $100 on three separate NFL games and win all three, you would walk away with $300. If you could have combined those three games into a three-team parlay and only bet $100, you would walk away with $600 at most online books depending on their actual posted odds for these types of wagers. A parlay can start with as few as two teams all the way up to as many as 15. Some books today have set special odds for as many as 25 teams in one single parlay bet, but we are getting way ahead of ourselves for the purpose of this discussion.
Going back to that original three-team parlay, the one big caveat is that all three picks have to be correct. Once any one of your picks in a parlay is wrong, the whole bet is lost. If for some reason, one of the three picks ends in a PUSH (tie), than the parlay bet can still be a winner as a two-team play if you win the other two games.
Also read in our “How To” series: How To Read and Understand a Sports Betting Total Line
Understanding how a parlay works is the simple part of the equation. Understanding the true odds behind actually cashing in on a parlay bet is much higher math. There is a reason why sportsbooks are willing to payout such high odds on a graduated scale based on the total number of picks that are grouped together and it is called ‘degree of difficulty’.
Anyone who bets on sports on a regular basis already knows just how hard it can be to pick just one winner, no matter what sport we are talking about. Playing parlays with a certain degree of success is all about the confidence level you have in each of your individual picks. The higher the level of confidence you have in your actual picks, the more sense it makes to possibly group them together in one parlay bet.
The actual sweet spot for a parlay is two or three teams since the betting odds for four or more teams starts to swing much more heavily in the sportsbook’s favor verse the actual return they are offering on that bet. The actual odds on a two-team parlay are 3/1 and most books payout 2.64/1. Moving to three teams, the actual odds are 7/1 for that 6/1 payout. When you jump up to four teams, the actual odds on cashing in on that bet are 15/1, yet the payout odds at most books is only 12.3/1. While the house edge on a two or three-team parlay is around 10 to 12 percent, it jumps all the way to over 30 percent at four teams and it keeps going up from there.