The truth about parlays and when they actually make sense
Parlays are one of the most profitable products for sportsbooks. The house edge on parlays is typically 20-30% compared to ~4.5% on straight bets. This is because parlay odds don't reflect true independent probabilities.
For a 2-leg parlay with -110 odds on each leg:
Each leg at -110 = 52.4% win rate
True parlay odds: 0.524 × 0.524 = 27.5%
Fair payout: +264
Most books pay around +260
Some pay as low as +250
You're getting shortchanged
This gap widens significantly with more legs.
| Legs | Typical Payout | Win Probability* | House Edge |
|---|---|---|---|
| 2 | +260 | 27.5% | ~8% |
| 3 | +600 | 14.4% | ~12% |
| 4 | +1100 | 7.5% | ~18% |
| 5 | +2200 | 3.9% | ~24% |
| 6 | +4500 | 2.0% | ~30% |
Despite the math, there are specific situations where parlays can have positive expected value:
When outcomes are positively correlated, the combined probability is higher than the product of individual probabilities.
If each individual leg has positive expected value, the parlay maintains positive EV (though variance increases).
If you have two bets each with 55% true win probability at -110:
The catch: You need to actually be able to identify +EV bets consistently, which is very difficult.
Building "synthetic parlays" by taking the best line at each book:
By shopping, you reduce the house edge on each leg, making the combined bet closer to fair value.
SGPs combine multiple bets from the same game. Sportsbooks love them because:
If you use SGPs, build them around a core thesis. Example: "The Lions will dominate and run the ball" → Lions spread + D'Andre Swift rushing Over + Game script-dependent props.
| Bet Type | % of Bankroll | Reasoning |
|---|---|---|
| Straight bet | 1-3% | Standard unit |
| 2-leg parlay | 0.5-1% | Higher variance |
| 3-leg parlay | 0.25-0.5% | Much higher variance |
| 4+ leg parlay | 0.1-0.25% | Entertainment only |
At -110 odds per leg: