Parlays are one of the most popular bet types in sports betting — and one of the most misunderstood. Sportsbooks love them because they usually carry a massive edge. But that doesn’t mean parlays are always bad. Here’s everything you need to know.
What is a Parlay?
A parlay combines two or more individual bets (called “legs”) into a single wager. Every leg must win for the parlay to pay out. If even one leg loses, the entire bet loses.
The upside? The odds multiply together, creating much larger potential payouts than betting each leg individually.
The tradeoff is simple: higher potential payout, lower probability of winning.
How Parlay Payouts Are Calculated
Parlay payouts are calculated by converting each leg’s American odds to decimal odds, multiplying them together, then converting back.
Step by Step
Convert each leg to decimal odds:
Positive odds: (odds / 100) + 1 → +150 becomes 2.50
Negative odds: (100 / |odds|) + 1 → -110 becomes 1.909
Multiply all decimal odds together
Multiply by your stake to get the total payout
Example: 3-Leg Parlay
| Leg | American Odds | Decimal Odds |
|---|---|---|
| Chiefs ML | -150 | 1.667 |
| Over 45.5 | -110 | 1.909 |
| Kelce TD | +120 | 2.200 |
Combined decimal odds: 1.667 × 1.909 × 2.200 = 7.003
$100 bet pays: $700.30 total ($600.30 profit)
Betting each leg separately at $100 each ($300 total risk) would return far less on a combined win. That’s the parlay appeal.
The Math Problem with Parlays
Here’s what sportsbooks don’t advertise: parlays compound the vig.
Each individual bet already has a built-in house edge (the vig/juice). When you parlay bets together, those edges multiply just like the odds do.
If each leg has a 5% house edge:
1 bet: 5% edge
3-leg parlay: ~14.3% edge
5-leg parlay: ~22.6% edge
10-leg parlay: ~40.1% edge
This is why “same game parlays” with 8+ legs are a goldmine for sportsbooks. The combined edge is enormous.
When Parlays Actually Make Sense
Parlays aren’t always -EV. There are legitimate reasons to use them:
Correlated parlays: When outcomes are naturally linked (e.g., a team winning AND the game going over), the true combined probability is higher than the sportsbook prices. Some books don’t properly adjust for correlation.
+EV legs only: If every individual leg is +EV, the parlay is also +EV. The key is that each leg must have positive expected value on its own.
Bankroll constraints: If you have a small bankroll and want exposure to multiple outcomes, a small parlay can be more capital-efficient than individual bets.
Reduced juice parlays: Some sportsbooks offer reduced vig on parlays (like FanDuel’s same game parlays). If the reduction is big enough, it can offset the compounding edge.
Parlay Dos and Don’ts
Do:
Calculate your actual payout before placing the bet
Only parlay legs that are individually +EV
Keep parlays to 2-3 legs to limit vig compounding
Look for correlated outcomes the book hasn’t fully priced
Don’t:
Build 10+ leg parlays chasing huge payouts
Parlay heavy favorites together (tiny edge, huge risk)
Use parlays as your primary betting strategy
Trust “parlay of the day” picks from social media
Key Takeaways
Parlays multiply odds for bigger payouts, but every leg must win
The vig compounds with each leg, giving the house a growing edge
Parlays make sense when every leg is +EV or when outcomes are correlated
Keep it to 2-3 legs and always calculate your actual payout before betting
