Understanding Parlays: The Math Behind the Moonshot

You put down $10 on a 5-leg NFL parlay. Every team hits. Suddenly you're up $2,000.

That's the dream. That's why 70% of all NFL and NBA bets on FanDuel are parlays. The thrill of sweating multiple games, the community of sharing parlay cards on social media, the fantasy of turning pocket change into a mortgage payment.

Parlays are genuinely fun. There's nothing quite like watching your 4th leg hit and realizing you're one game away from a life-changing payout.

But here's the tension: there's a reason sportsbooks love them even more than you do.

This isn't an article telling you to never bet parlays. Instead, we're going to pull back the curtain on how the math actually works, why the house edge compounds with every leg you add, and how to make smarter decisions if you choose to bet them.

Parlays can be entertaining. Understanding the math helps you decide when the entertainment value is worth the cost.

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What is a Parlay Bet?

A parlay combines two or more individual bets into a single wager. The catch: ALL legs must win for the parlay to cash. One loss and the entire bet is lost.

The tradeoff for this added risk is a higher potential payout than betting each leg individually.

That all-or-nothing nature is what makes parlays exciting—and what makes them so profitable for sportsbooks.

If you're new to reading odds, check out our How to Read Betting Odds guide first.

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How Parlay Odds Compound

Here's where it gets interesting—and where most bettors don't realize what's happening.

When you parlay bets together, the probabilities multiply. Each additional leg doesn't just add risk—it compounds it exponentially.

The Math on -110 Legs

A standard -110 bet requires you to win 52.4% of the time just to break even. When you parlay multiple -110 legs:

• 2 legs: 52.4% × 52.4% = 27.4% win probability
• 3 legs: 14.4% win probability
• 4 legs: 7.5% win probability
• 5 legs: 3.9% win probability

Now let's compare what you should get paid (fair odds) versus what sportsbooks actually pay:

Want to see the exact math on your parlay? Use Our Parlay Calculator →

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The Parlay Tax: Why Sportsbooks Love Multi-Leg Bets

This is the core concept most bettors never see clearly.

On a single bet at -110, the house edge ("vig") is about 4.5%. That's the cost of doing business. But with parlays, that vig compounds with each leg you add.

The Numbers Don't Lie

Let's look at real data from state gaming commissions:

• New Jersey (September 2024): Sportsbooks held 24.2% on parlays vs just 4.4% on straight bets.
• Illinois (2023): 194.6 million parlays were placed with only a 17.74% success rate, generating $580.5 million in sportsbook revenue.
• FanDuel (2023): Parlays accounted for 70% of all NFL and NBA bets.

Think of it like a toll road. Each leg you add is another toll booth. A straight bet costs you one toll. By the time you've added 4-5 legs, you've paid more in tolls than most bettors realize.

These aren't secrets—it's just math most bettors haven't seen laid out clearly. Understanding your betting edge starts with knowing what you're paying.

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What About Same-Game Parlays (SGPs)?

Same-game parlays—where all legs come from a single game—have exploded in popularity. Every sportsbook promotes them heavily on their homepage.

Here's the thing: sportsbooks used to BAN these.

Why Were They Banned?

Because bettors had an edge. When you combine outcomes from the same game, they're often correlated. If one thing happens, it makes another outcome more likely.

For example:

• If you bet Chiefs to win AND Mahomes Over 275 yards—those outcomes are linked
• If the Chiefs win big, Mahomes is more likely to have thrown for a lot of yards
• If your parlay priced these as independent events, you'd be getting value the house didn't intend

Now They Price In the "Correlation Tax"

Modern SGP algorithms detect correlation and reduce your payout accordingly. The result: SGP house edges can be 10-20% higher than standard parlays.

Industry reports show SGP hold rates running 3-5x higher than straight bets.

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Featured Parlays and Influencer Picks: What You Should Know

Open any sportsbook app and you'll see them: "Featured Parlays," "Today's Best Bets," celebrity picks, influencer specials.

Ask yourself: If this parlay was such great value, why would they promote it?

How Pre-Built Parlays Work

• Curated for the house: Legs are selected because they look appealing, not because they're good value
• The "trap leg" phenomenon: Often includes one leg that's statistically less likely than it appears to casual bettors
• Correlation already priced in: Any SGP correlation is already factored against you
• Promotion = profit: Industry analysis shows sportsbooks promote parlays aggressively because the hold rate is 3-5x higher than straight bets

This doesn't mean every featured parlay is a trap—but it does mean you should apply the same scrutiny you'd apply to any bet rather than trusting homepage placement.

Want the full breakdown? We ran a real FanDuel featured parlay through our calculator and found a 24% hidden markup. Read the complete analysis: Pre-Built Parlays Exposed: The Hidden Math Behind Featured Bets.

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If You're Going to Parlay: A Smarter Approach

Look—parlays aren't going anywhere, and there's nothing wrong with betting them for entertainment. The key is doing it with eyes open.

1. Stick to 2-3 Legs Maximum

A 2-leg parlay has roughly a 10% house edge. A 5-leg parlay? Over 34%. The math gets dramatically worse with each leg.

Less exciting payouts, but much better odds of actually winning.

2. Budget It as Entertainment

• Treat parlay money as entertainment expense, not investment
• Never parlay money you can't afford to lose
• Don't chase losses with bigger parlays

If you're consistently putting serious bankroll into 5+ leg parlays, you should read our guide on proper bankroll management.

3. Know the True Odds Before You Bet

Use our Parlay Calculator to see exactly what you're getting versus fair odds. If the gap is too large, maybe that 5-legger isn't worth it.

Our Fair Odds Calculator can also help you remove the vig and see true probabilities.

4. Look for +EV Opportunities (Rare But Possible)

If you have genuine edge on multiple bets—meaning each leg is individually positive expected value—parlaying them can actually compound your edge rather than compound the house's edge.

But be honest with yourself: most recreational bettors don't have consistent edge on single bets, let alone multiple legs.

5. Consider Alternatives

• Round robins: Reduce variance by creating multiple smaller parlays from your selections
• Straight bets: Better expected value, especially with proper Kelly Criterion sizing
• Smaller parlays, more often: Two 2-leggers beat one 4-legger mathematically

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Frequently Asked Questions About Parlays

Q: Are parlays worth it?
A: Mathematically, parlays have higher house edges than straight bets—sometimes significantly higher. For entertainment with small stakes, they're fine. For serious bankroll growth, the math favors straight bets with proper bankroll management.

Q: What happens if one leg of my parlay pushes?
A: Most sportsbooks reduce your parlay to fewer legs. A 4-leg parlay becomes a 3-leg parlay, and the payout adjusts accordingly. Some same-game parlays may void entirely—always check your sportsbook's specific rules.

Q: Why do sportsbooks push parlays so hard?
A: Parlays generate significantly more revenue per dollar wagered. State data shows sportsbooks hold 24%+ on parlays versus 4-5% on straight bets. In some markets, parlays account for over 70% of sportsbook profits despite being a smaller share of total betting handle.

Q: Are same-game parlays worse than regular parlays?
A: Generally yes. Books add extra margin (10-20%) to account for the correlation between legs in the same game. Even though correlated outcomes might seem like "good value," the sportsbook has already priced that correlation in—and then some.

Q: What's the best parlay strategy?
A: If you're going to parlay: keep it to 2-3 legs maximum, budget it as entertainment rather than investment, use a parlay calculator to understand what you're actually getting paid versus fair odds, and never chase losses with bigger parlays.

Q: Can sharp bettors make money on parlays?
A: Yes, but only by parlaying +EV bets together—compounding edge rather than compounding vig. This requires having consistent positive expected value on individual bets first. Most recreational bettors don't have this consistent edge, making parlays a losing proposition long-term.

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Calculate Your Parlay Odds

Before placing your next parlay, understand exactly what you're betting on:

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