1. #1
    Bsims's Avatar Become A Pro!
    Join Date: 02-03-09
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    Parlays and expected returns

    I assign a probability to each potential wager. Then I compute the expected return by multiplying this by the European style odds. Here is an example from last night.

    Wager Prob LV Odds EUR Odds Exp Ret
    Over 7.5 ladcub 0.481 123 2.225 1.070
    KC- -3.5 0.507 119 2.195 1.113
    Under 216.5 LACLAL 0.550 101 2.007 1.104

    It's pretty straight forward. Since these were the best 3 I found on Nitrogen, I looked at a 3 team parlay. The probability is the product of the three probabilities. So here is the expected return calculation

    Prob EUR Odds Exp Ret
    0.134 9.802 1.315

    The puzzle to me is why is the expected return for the parlay higher than all of the individual wagers? Does that mean the parlay is the smarter wager?

    FWIW: Had it not for the untimed plays in the KC-Oak game, the parlay would have been a winner.

  2. #2
    Life-Style Arbitrage
    Waterstpub87's Avatar SBR PRO
    Join Date: 09-10-09
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    This is difficult to understand, I assume that you mean you assign your own winning % to the games (Handicapped them as it were)

    If you are producing an edge, parlays are going to increase that:

    Consider if you pick at 57% against -110 lines

    On 3 Hundred dollar wagers against -110, you should return roughly 30 dollars

    Betting a 300 parlay those in a parlays would be .57*.57*.57 = .1851 * 6 = 1.111 return = 333

    .57 would equate to 4.62% advantage over the house

    .481 = 107 vs 123 = .4481 = .0329 advantage
    .507 vs 119= .4566 = .0504 advatage
    .55 vs 101 = .4975 = .0525 advantage

    Your average calculated advantage would be .0452, equivalent to winning .569% of your bets against even money

    So betting straight wagers is roughly 28.5 on 300

    Parlay would be .569*.569*.569= .1842 winning % * 6 = 1.105 * 300 = 331.59 - 300 = 31.59 profit

    If this was the case, and your edge is correctly assessed, it would be in your interest to bet parlays. I would be more concerned that my edge was actually this high. If your wrong, and you turn out to have a lower edge, you go from being slightly winning or breakeven, to losing rapidly.

  3. #3
    HeeeHAWWWW's Avatar Become A Pro!
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    Quote Originally Posted by Bsims View Post
    The puzzle to me is why is the expected return for the parlay higher than all of the individual wagers? Does that mean the parlay is the smarter wager?
    Higher EV, lower EG. All that extra edge is cancelled out by wildly greater variance.

  4. #4
    fate-choice's Avatar Become A Pro!
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    Can you clarify how betting 100@-110 gives an expected 30$ ?

    What I know of probables is that your parlay had a 13% chance of winning but because the odds are products +1 for each the return value is higher.

    Les likely to win but if it does you obviously make a higher return.

    I'm not sure why your computing it like that tho. Six parlay with all individual odds at 90% is a parlay with just above a coin flip.

    Unless they are big dogs and you have a feeling it doesn't seem worth putting a less than 70% pick in a parlay.

    3 weeks in a row 7-10 pick pars went off by one. I should change my name to off by one

  5. #5
    arwar's Avatar Become A Pro!
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    simply calculate the juice on any parlay (it is usually between 15-20% - for street bookies) it pays more because you have to win all the legs