One of the biggest pieces of advice typically seen in the responsible gambling community is to stay away from parlays. That doesn’t have to be the case.
While it’s true that when a bettor places a parlay, the juice (or vig) from all the legs of the parlay is compounded and the expected ROI of the wager gets lower and lower the more legs that are included.
However, that assumes that the legs of your parlay are not profitable bets themselves. If you’re using the OddsJam Positive Expected Value (EV) page and are beating the no-vig line of the sportsbooks, then your bet is mathematically profitable.
Now, if you were to parlay multiple profitable bets, your edge over the house compounds instead of the other way around.
Let’s use an example of a standard two-leg parlay with each leg at -110 odds. When parlayed together, the odds become +264.
Keep in mind that PrizePicks and Underdog are different from standard sportsbooks and only pay out 3x, or +200 on two-leg parlays.
In order to consistently profit with -110 straight bets, you need to win over 52.4% of the time. That extra 2.4% of edge that separates a -110 bet from a pure coin flip is how the sportsbooks guarantee they will make a profit over time.
The sportsbooks take that 52.4% and multiply it by itself which becomes 27.4%, which translates to +264.
Let’s go back for a second to why parlays can be dangerous.
For most casual bettors, it’s nearly impossible to be profitable over time even with straight bets. Statistically speaking, most bettors will win very close to 50% of their wagers over a large sample size. If that bettor is betting $110 to win $100 on every bet, then after two bets (a win and a loss) they will be down $10.
That’s $5 lost per $110 straight bet over a large sample size, which can easily become $500 lost once 100 bets have been placed and the bettor won 50 and lost 50.
The odds of winning a two-leg parlay on -110 spreads or totals is 25% since each side has a 50 percent chance of winning (0.5 x 0.5 = 0.25).
Sportsbooks love promoting parlays because their edge increases for each leg, but bettors love the possibility of hitting a big win like a six-leg parlay that pays out +4741 odds.
That’s a 25% edge for the house. You would never go play a casino game with a ridiculous edge like that.
For casual bettors, longshot parlays are not a good idea. If you think you’re smarter than the books to a level that you can make up a 25% edge … you’re not.
It’s a different story for sharps that consistently can place profitable bets that beat the no-vig closing line.
If you can do that, you’ll win those -110 straight bets at a rate higher than 52.4%.
You can see how that winning percentage of 55% can compound the edge already, let’s see how it translates for two-leg parlays:
That edge only goes up the higher the more legs with an edge you include. However, the more legs the less likely you are to win your bet, even if it is mathematically profitable with +EV.
A parlay bettor is susceptible to huge swings of variance. For example, if a bettor wins a +5000 parlay (50/1) one out of every 40 times instead of 50, that bettor is insanely profitable. That said, there would probably be times when that bettor loses 40 or more +5000 parlays in a row.
It’s crucial to manage your bankroll properly, especially when playing the long game with parlays.
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