Parlay Bet: What It Is and How It Works

What Is a Parlay Bet?

In sports betting, a parlay bet is when a bettor makes two or more bets and combines them into one wager. Depending on the sportsbook or the region, these bets may be called “accumulators” or “multis.”

The gambler must win every small bet to win the parlay bet, and losing just one of the smaller bets loses the parlay. A sportsbook commonly provides larger payouts for adding more games to each parlay. Parlay bets are riskier since they comprise many individual chances but give a bigger payout if all individual wagers win.

How to Make a Parlay Bet

Making a parlay bet is a straightforward process that involves selecting multiple individual bets and combining them into a single wager. To begin, you'll need to choose a sportsbook, such as BetMGM, FanDuel, or DraftKings, which are some of the most popular online platforms for sports betting.

Once you're logged into the sportsbook, navigate to the sport or event you want to bet on. Whether it’s football, basketball, or another sport, you'll see a range of betting options for each game, including point spreads, moneylines, and totals. To create a parlay, you need to select at least two different bets. Simply click on the individual bets you want to include in your parlay. Each selection will be added to your bet slip, which is typically located on the side or bottom of the screen.

After you’ve made your selections, go to your bet slip and look for the option to combine these bets into a parlay. The sportsbook will automatically calculate the odds for the parlay based on the individual bets you’ve selected. In the case of BetMGM, once the bets are combined, you’ll see the potential payout for your parlay if all your picks win.

Calculating Payouts

Calculating the odds of parlay bets can be tricky, partially because of how odds are expressed in sports betting in the United States. Any sportsbook will calculate potential winnings from a parlay and is often what gamblers rely on.

To calculate a payout:

1. Convert the American odds to decimal odds.
   
2. Multiply all the decimal odds together.
3. Multiply the result by your bet amount.
   
4. Subtract your original stake to get the parlay odds.
   

Let’s say that a bettor is parlaying three-point spreads, each at -110. First, convert those odds to decimal, which is 1.91. Then multiply them together:

1.91 x 1.91 x 1.91 = 6.97    

Then multiply this by a bet amount of $10:

6.97 x 10 = 69.7

Then subtract the original bet amount:

69.7 – 10 = 59.7

This parlay pays out $59.70 for every $10 bet. In American odds, that’s +597, meaning this parlay pays nearly 6-1. There is a simple rule for -110 wagers. A double bet pays about 2.6-to-1, and a triple parlay pays about 6-to-1. From there, the odds roughly double for every -110 bet added to the parlay.

Parlay vs. Teaser Bet

A parlay bet and a teaser bet are both types of wagers that combine multiple selections into a single bet, but they differ significantly in how the odds and conditions are applied. In a standard parlay bet, you select two or more individual bets, and all of the selections must win for the parlay to pay out. A teaser bet, on the other hand, is a variation of a parlay where bettors are allowed to adjust the point spreads or totals in their favor, but this comes at the cost of a lower potential payout.

In a teaser, you can move the spread by a set number of points (usually 6, 6.5, or 7 points) for each game, which makes it easier for the selections to win. For example, if a football team is favored by 7 points, you can reduce the spread to 1 point in a teaser bet. This increases your chances of winning the bet, but the adjusted odds lower the payout compared to a standard parlay.

The main difference between the two is the trade-off between risk and reward. In a parlay, you take on higher risk because the individual lines or totals are not adjusted, but if all your selections win, the payout is much higher due to the compounded odds. A teaser reduces the risk by giving you more favorable lines, but this results in smaller payouts.

Advantages of Parlay Bets

Here are some advantages of parlay bets:

• Higher Potential Payouts: One of the most appealing aspects of parlay bets is the potential for higher payouts compared to individual bets. In a parlay, the odds of each selected bet are multiplied together. If you place a $10 parlay bet with three legs, each with odds of +100, the payout is $70. However, placing those three bets individually would yield just $10 per bet.
• Increased Excitement: Parlay bets can make watching games and events more thrilling, as multiple outcomes hinge on the success of each leg. Bettors can find that having a parlay bet adds an extra layer of excitement, as they cheer for several teams or outcomes to come through simultaneously. For example, instead of simply being invested in a single NFL game on Sunday, a bettor could have a single stake across games ranging from Thursday to Monday.
• Diversification of Bets: By combining multiple bets into one parlay, bettors can diversify their wagers and mitigate risk. Instead of betting all their money on a single outcome, a parlay allows bettors to spread their risk across several events or games. Though there is more risk in the sense that it is a single wager, the outcome is not dependent on a single event.
• Promotions and Bonuses: Many sportsbooks offer special promotions or bonuses for parlay bets, which can enhance their attractiveness. These promotions might include parlay insurance, where bettors receive their stake back if one leg of their parlay loses. Others could include enhanced odds that provide even greater potential payouts.

Risks to Parlay Bets

Unsurprisingly, there are some downsides to parlay bets. Here are some of the risks to keep in mind.

• Higher Risk of Losing: The clear significant disadvantage of parlay bets is the increased risk of losing the entire wager. In a parlay, all selections must win for the bet to be successful. If even one leg loses, the entire parlay is lost, regardless of how many other bets were correct.
• Lower Probability of Winning: Parlay bets generally have a lower probability of winning compared to individual bets. While each selection in a parlay might have a reasonable chance of winning on its own, the combined probability of all selections winning decreases significantly as more legs are added. This means that, while the potential payouts are enticing, the likelihood of actually hitting a parlay bet is often slim.
• Complicated Betting Strategy: Creating a successful parlay bet can require a more complex betting strategy than placing single bets. Bettors need to analyze multiple games or events. In some cases, consider how the outcome of a morning game may influence different team's strategies in an evening game. Additionally, spread over a longer timeframe, more uncertainties could arise such as injuries, trades, or changed perspectives.
• Delayed Cash Flow: There could be parlay bets that tie up cash for a long period. For example, a single parlay bet could contain picking the Super Bowl champion and the World Series champion. For the bet to fully settle, a bettor may have to wait from February (when the NFL season ends) to potentially November (when the MLB season ends) for their cash to be released. This could result in time value of money implications.

Cashing Out Parlay Bets

Some sportsbooks offer the feature of cashing out a parlay bet, allowing bettors to settle their wagers before all legs of the parlay have been completed. This option provides flexibility and can help bettors minimize potential losses or secure profits if they feel uncertain about the outcome of the remaining legs.

For instance, if you have a parlay with three bets, and two of the selections have already won, you might opt to cash out early to lock in your winnings, even if the final leg is still pending. This feature adds a layer of strategy to parlay betting, allowing bettors to make more informed decisions based on real-time developments.

However, the ability to cash out early often comes with certain conditions and may not be available for all parlay bets. Each sportsbook has its policies regarding cashing out, and the terms may vary based on factors such as the number of legs in the parlay and the types of bets included. For example, some sportsbooks like BetMGM, FanDuel, or DraftKings may only allow early cashouts on certain events or when specific criteria are met such as live betting situations.

The amount you receive when cashing out early may also differ from the potential payout if you were to let the parlay ride until all legs have been settled. Generally, the cash-out amount will be calculated based on the current status of the remaining bets and the likelihood of their success. This means that while you may secure a portion of your potential winnings by cashing out, you could be giving up a larger payout if the remaining selections are successful.

Example of a Parlay Bet

If a bettor thinks that the Kansas City Chiefs (+4) and New York Giants (-6) will cover their spreads on an NFL Sunday, they may use $10 and individually bet on these teams for $5 each. If both succeed, the win is around $19. However, the bettor can parlay these bets together for a win of around 2.65 times the bet. The possible outcomes would be as follows:

• Both teams cover: Win ($26.50)
• Chiefs cover, Giants do not: Loss (-$10)
• Giants cover, Chiefs do not: (-$10)
• Both teams do not cover: Loss (-$10)

The parlay increases risk but gains more over two individual bets. Parlays can be more complicated and consist of more individual bets. A bettor could bet on five teams covering their spread instead of just two. If one team doesn’t cover their spread, the whole bet is lost. However, if all five are covered, the payout would be high: around +2335, a win of $230.35 on a $10 bet.

The Bottom Line

Parlay bets are made up of two or more wagers. They are a way of combining individual bets into one. Parlay bets are much harder to win than regular bets and offer larger payouts.