Parlays are Profitable

A lot of bettors won't bother to read this article because it's about parlays. They have already decided parlays are bad bets, so why read an article about them? A lot of them were taught about the evils of parlays by their bookmakers.

.....But some bookmakers refuse to accept certain parlay bets, such as parlaying the runline with the total on a baseball game. Some don't even allow parlaying the pointspread with the total on a pro basketball game. Sometimes you will find much lower betting limits on parlay bets than on 'normal' bets, or even short payouts, such as 6-FOR-1 against 3-bet parlays rather than the more acceptable 6-TO-1. Think about it...No bookmaker seems anxious to promote the use of parlay bets. One well-known Las Vegas sportbook manager insists he is protecting bettors from parlays by limiting their use. Meanwhile, he invites us to bet on who will win the next World Series charging 30+ percent vigorish on futures bets.

Does any of the above seem a little strange to you?

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Let's get real. The truth is, if parlay bets were really bad for bettors bookmakers would be promoting the hell out of them.

Take a look at this proposition:

TRUE OR FALSE: A 3-bet parlay paying 6-to-1 has less vigorish than three single bets risking 11 to win ten.

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I am sure you will agree that most sport bettors would answer "False" to that statement. Even many very experienced handicappers think a 3-bet parlay has higher vigorish charges than 3 'normal' 11-10 bets.

The statement is true. A 3-bet parlay paying 6-to-1 costs less in vigorish than three separate bets risking 11 to win 10.....Here's the proof:

Ignoring ties, eight different outcomes are possible with any three sport bets:

W-W-W W-W-L W-L-W L-W-W W-L-L L-W-L L-L-W L-L-L

With 8 possible outcomes a bookmaker could get 8 different 3-bet parlays from 8 different bettors on the same three propositions. Let's say that happens, and say each of the 8 different bettors risks $100 to win $600.

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When the games are over, seven bettors lose their $100 and the eighth bettor wins $600. The bookmaker, who originally received a total of $800 from the eight different bettors, gives the winner a total of $700.....$600 in winnings plus the $100 originally risked by the bettor. The remaining $100 is profit for the bookmaker.

This is where most gamblers go wrong when figuring the bookmaker's profit. They conclude that since $100 is 12.5% of $800, the bookmaker made a whopping profit of 12.5 percent.

But hold on a minute. Let's take a closer look at what really happened here.....Remember, a 3-bet parlay is exactly that: Three bets. Not one bet. Three bets tied together ("parlayed"). Suppose the three bets were laid individually, rather than as a parlay. Assume a bettor laid $100 on a standard "11-10" bet to win $91, and does win, and then suppose he re-bets the entire $191 on a second bet, and wins again. The payback on the second bet is $191 x 1.91, or $365. Now suppose he risks the entire $365 on yet a third bet and wins again.....$365 x 1.91 = $697. He's won a total of $597. The bettor began with $100, he won all three bets, he ended with $697.

Seen as individual bets, it's easy to see that the bettor risked a lot more than the original $100. He risked $100 on the first bet, then he risked $191 on the second bet, then he risked $365 on the third bet. That's a total risked of $656 on the three bets to win a profit of $597. Note that had he simply risked $100 on a 3-bet parlay he would have ended with $700 instead of $697...the 3-bet parlay actually costs slightly less. (It works out to about 4.35% per bet rather than the 4.55% charged on single bets.)

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The eight bettors who risked $100 each on the eight different 3-bet parlays did not bet only $800. Not at all. Four of those eight bettors were fated to win their first bet and re-bet everything on the second bet. Two of those four bettors were then bound to win the second bet and re-bet everything on the third bet...Those eight bettors actually bet a total of $2,294, not $800. The $100 that was finally kept by the bookmaker is about 4.35% of $2,294.

So, is that why bookmakers don't encourage the use of parlays, - because the bookmaker's commission is slightly lower? No, that doesn't float. His commission is slightly higher on most other parlays. The difference in vigorish is insignificant. In fact, if more bettors used parlays it would result in a big increase in gross business for the bookmaker. In effect, $100 bettors would be betting $191 on that second game and $395 on that third game. In effect, that translates to a giant increase in "sales" for the bookmaker. Going by that, it seems that parlays would be a great deal for bookmakers.

If that were the case, you can bet your lungs bookmakers would encourage parlays.

Then why don't they encourage parlays? The reason is obvious. Those bettors who understand how and when to use parlays can use them to their advantage. Bookmakers are afraid of knowledgeable bettors using parlays.

This particular article you're reading is meant only to prove that parlays do NOT carry higher bookmaker charges than individual bets risking 11 to win ten. It's important right here to note we do NOT recommend the random use of parlays. Used wrong they can and will be disastrous. Make no mistake about it, bookmakers would love average bettors to wade in using lots of random parlays. It's those pesky wise guys that spoil everything for the bookmakers. The correct use of parlays can dramatically reduce your downside risk and dramatically increase your profits. Reducing your downside risk and increasing your profits is, of course, not in the bookmakers' best interest.