Parlays and Matched Betting

What is a Parlay?

A parlay is betting on the outcome of two or more events. Each bet within a parlay is referred to as a leg (2, 3, and 4 leg parlays are quite common, but sometimes there are crazy 20 leg parlays!). For your bet to win, every leg needs to win. The image below shows a parlay on the Atlanta Falcons and Detroit Lions moneyline; for this bet to win, both the Lions and the Falcons need to win. If either team loses, the bet loses, even if the other team wins.

In this scenario, there are four possible outcomes, only one of which results in a winning bet.

1. Lions win, Falcons win: Parlay wins
2. Lions win, Falcons lose: Parlay loses
3. Lions lose, Falcons win: Parlay loses
4. Lions lose, Falcons lose: Parlay loses

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Since parlays require multiple outcomes to happen, the payout on a winning parlay is higher than the payout on any of the individual legs (Hence why hedging parlays can get complicated in a hurry!) First, convert the odds to decimal odds to determine the final odds on a parlay. Then, multiply the odds for each leg together. This will give you the final odds for a parlay.

Same Game Parlays

Same Game Parlays (SGP) are where every leg is a bet within the same game. The example below shows the Chiefs moneyline and Travis Kelce to score a touchdown.

Just like a regular two-leg parlay, there are four possible outcomes, only one of which results in a winning bet.

1. Chiefs win, Kelce TD: Parlay wins
2. Chiefs win, Kelce no TD: Parlay loses
3. Chiefs lose, Kelce TD: Parlay loses
4. Chiefs lose, Kelce no TD: Parlay loses

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A significant difference between regular parlays and SGPs is that there is correlation involved in SGPs. Correlation in a SGP is when the outcome of one leg influences the likelihood of the outcome of the other legs. In the example above, if Kelce scores a touchdown, the odds of the Chiefs winning the game increase because Kelce plays for the Chiefs. A regular two-leg parlay with odds of -178 and -160 would have final odds of +154. However, due to the correlation between Kelce scoring a touchdown and the Chiefs winning, the odds for this SGP are only +136. That is a ~13% lower payout due to correlation.

Parlay Promotions

There are three main types of parlay promotions.

1. Profit Boosts

This is when the payout for a winning parlay is increased, just like a standard profit boost. Similar to a regular profit boost, the max bet amount, boost percentage, and maximum additional winnings will vary per promotion.

2. Second Chance Parlay

Similar to a normal Second Chance Bet, you will receive a refund if your parlay loses. It does not matter how many legs of the parlay lose, just that it loses.

3. Parlay Insurance

Parlay insurance is when you get a refund if only one leg of your parlay loses. If more than one leg loses, you do not get anything back.

Additional Factors

When looking at parlay promotions, there are several other factors to consider. Not all promotions will have the following.

1. Minimum number of legs
2. Minimum final odds
3. Minimum odds per leg
4. Impact if a leg voids

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The impact if a leg voids can be particularly tricky. An example is a parlay insurance promotion that requires a minimum of three legs where you get you get a Bonus Bet refund if exactly one leg loses. If you bet on three different MLB games, one wins, one loses, and one voids due to a weather postponement. Even though exactly one leg lost, you will not get a refund because the voided leg changed your three-leg parlay to a two-leg parlay. The minimum number of legs for this promotion was three legs. Therefore, your bet no longer qualifies for the promotion.

Parlay Promotions and Matched Betting

Based on the number of possible outcomes increasing drastically as more legs are added to a parlay, hedging parlays becomes extremely difficult. A two-leg parlay has four possible outcomes, a three-leg parlay has eight, and it only increases from there. Placing the required number of hedge bets often results in the cost being greater than the value of the promotion.

Even though hedging all the possible outcomes for parlays is often impractical, the rewards from some parlay promotions can be converted with matched betting. Due to this, depending on the terms of the parlay promotion, there’s another approach to consider: the +EV approach.

What is +EV Betting?

EV stands for expected value, and it essentially is the difference between the odds of an event taking place and the sportsbook's published odds.

When you place bets that have a larger chance of winning than is predicted by the sportsbooks, this is known as positive expected value or +EV for short. The opposite can be said for negative expected value or - EV for short, where you have less of a chance of hitting your bet than is predicted by the sportsbooks. -EV is sometimes referred to as a probability gap.

+EV can get complicated, but in its simplest form, it’s betting in a way where you expect to profit over an extended period. An important thing to understand for +EV betting is that it is subject to risk and variance because you don't hedge.

If you’re not familiar with variance, think of flipping a coin. When you flip a coin, it has a 50% chance of heads and a 50% chance of tails. However, flipping a coin ten times does not mean it will be exactly 5 heads and 5 tails. It could be, for example, 7 heads and 3 tails. That is because there is variance, in this case, 70% heads and 30% tails. This example is 20 percentage points away from the average. If you flip a coin 100 times, you will likely get much closer to 50% heads and 50% tails. This pattern of getting closer to the average continues as the sample size increases. Flipping a coin a million times will land extremely close to 50% heads and 50% tails.

Note: The +EV concepts outlined in this guide are very simplified. +EV could get an entire series of guides as its own topic. What is explained here is meant to be a useful introduction.

+EV Approaches

Before exploring +EV approaches to parlays, it is crucial to understand that the house edge on parlays increases for each leg. If we assume a regular spread bet has a 50% chance of happening and -110 odds, a sportsbook has a 10% house edge on a two-leg parlay compared to 4.5% on a straight bet. This only gets worse as more legs are added, all the way up to nearly 40% on an 11-leg parlay.

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Here are things to consider based on the type of parlay promotion.

1. Do you have the bankroll to sustain a long string of losses?
2. The larger the sample size, the better if the parlays you are placing are +EV. Are you willing to commit to betting on these whenever available?
3. Are you willing and able to research which lines are already +EV in an effort to reduce the house edge?

1. Profit Boosts

You will lose the majority of Profit Boost Parlays you place, but it will be a substantial win when one wins. Does the boost percentage outweigh the house edge? If it does, then theoretically, over time these will be profitable.

2. Second Chance Parlay

Similar to Profit Boost Parlays, you will lose the majority of bets you place. However, since you get a refund no matter how many legs lose, the risk is greatly reduced. The two most common types of refunds are Site Credit and Bonus Bets. Before proceeding ensure you have an understanding of How to Convert Site Credit and How to Convert a Bonus Bet.

Site Credit Refund: If you are refunded in Site Credit and convert it close to ~100%, then you are either breaking even or losing very little for each Second Chance Parlay. Another way to look at this is you are essentially getting free lottery tickets.

Bonus Bet Refund: If you are refunded in Bonus Bets and convert the Bonus Bet refund, the cost of a losing parlay is reduced by approximately 70%. For example, if you had a $10 Second Chance Parlay that loses, and you convert the Bonus Bet into $7, then you only lost $3 on the Second Chance Parlay. If the odds of the original $10 parlay were +200, a winning parlay would profit $20. By converting the Bonus Bet refund, your loss is reduced to $3. Therefore, you are betting $3 to win $20. This changes your effective odds to +667. In the long run, this should prove profitable, and the risk is reduced by converting the refund.

Double check the terms of the promotion to make sure that the refund can be used on straight wagers, and is not restricted just to parlays.

3. Parlay Insurance

Parlay insurance seeks to reduce risk and offers a partial refund if one of your legs does not hit. Each sportsbook has different rules and terms surrounding parlay insurance. Not every sportsbook has parlay insurance, but FanDuel and DraftKings have this type of insurance.

In this example let's assume you have a promotion that requires three legs. Using spreads for each leg that have an assumed 50% chance of happening, the odds of winning a three-leg parlay are 12.5%. The odds of exactly one leg losing are 37.5%. Resulting in a 50% chance of losing your bet and not receiving a refund.

Depending on the promotion's terms, you may be able to increase the odds of winning by choosing legs that have more than a 50% chance of winning, such as a -200 moneyline. Odds of -200 are equivalent to a 66% probability. A three-leg parlay with each leg having a 66% chance of winning has a 28.7% winning compared to 12.5% if each leg has a 50% probability. By wagering on legs that have a 66% chance of winning vs 50% chance of winning the odds of exactly one leg losing go from 37.5% to 43.1%.

Compared to a Second Chance Parlay, Parlay Insurance where you only get a refund if exactly one leg loses, there is a much larger chance of not receiving a refund.

Double check the terms of the promotion to make sure that the refund can be used on straight wagers, and is not restricted just to parlays.