The Truth About Parlays

They are the most electrifying bets in sports, promising massive payouts for pocket change. But beneath the hype lies a mathematical reality that has turned parlays into the sports betting industry’s golden goose.

It’s Sunday morning. You have $20 in your sports betting account. You could put it on the Chiefs to cover the spread, winning about $18. It’s a solid, sensible bet.

But then, you see the parlay builder. What if you took the Chiefs spread, the 49ers moneyline, and a Ja’Marr Chase touchdown prop?

Suddenly, that $20 offers a potential payout of $1,450. This is the allure of the parlay: the sports bettor’s lottery ticket. But while the adrenaline is real, the data shows that parlays are a sportsbook's dream, stacking the odds heavily against the player.

Since the 2018 legalization of U.S. sports betting, parlays have exploded. Nationwide, industry revenue hit $10.9 billion in 2023, up 44.5% year-over-year (@johnewing). This growth is driven by apps like DraftKings and FanDuel promoting "Same-Game Parlays" (SGPs). In Illinois alone, 60% of online wagers are now parlays (@esaagar).

Bettors love the high payouts for low stakes, but this popularity masks just how profitable they are for the house.

Sportsbooks earn more from parlays due to compounded "vig" (the house fee).

While single bets have a profit margin (hold) of about 3-5%, parlays jump to 20-30%.

• New Jersey Data: In September 2024, parlays accounted for 72.5% of sportsbooks' gross revenue, despite representing a much smaller share of the actual money wagered.

• The Hold Gap: Sportsbooks "hold" (keep) about 17.1% of all parlay bets compared to just 3-5% on straight bets.

• The Success Rate: The success rate for bettors on multi-leg parlays is roughly 17.74%, while the sportsbook enjoys an 18.2% margin on those same bets (bircheshealth.com).

The most common mistake bettors make is confusing "payout odds" with the "actual probability" of winning.

When you add legs, probabilities multiply—and since they are percentages (decimals less than 1), the final number shrinks rapidly.

Even if you pick legs that seem like "sure things," the math catches up to you quickly. Consider these examples of how probability degrades:

• Three "Safe" Legs (66% probability each): You might think three 2-to-1 favorites are a lock. However, 0.66×0.66×0.66≈28.7% overall chance of winning (about.darkhorseodds.com).

• Three "Strong" Favorites (70% probability each): Even with 70% confidence in each leg, your combined probability is only 0.70×0.70×0.70=34.3% (dyutam.com).

The house edge doesn't just add up; it compounds.

According to the Washington Post, a single -110 bet carries a 4.5% hold for the book. By the time you build a five-leg -110 parlay, the house edge (hold) balloons to approximately 20.8%.

You are effectively paying the "betting tax" five times over in a single transaction.

Use this knowledge to bet responsibly. Focus on value over hype.

To understand exactly what the book is offering you, convert your odds to decimals. For a standard -110 bet, the decimal odds are 1.91.

1. Multiply the decimal odds of all legs together.

2. Multiply that total by your stake.

3. Subtract your original stake to see your actual profit.

Example: A two-leg parlay with both legs at -110 (1.91):

1.91×1.91=3.648

A $10 bet returns $36.48 total (10×3.648), meaning your profit is $26.48.

Parlays are the "dessert" of sports betting—fun, flashy, and great for a rush, but unsustainable as a main course.

If your goal is long-term profit, the data suggests sticking to straight bets where the house edge is manageable.

But if you're going to chase the longshot, do it with your eyes open to the math: you aren't just betting on the athletes; you're betting against the power of compound probability.