Why Parlays/Multis Are Not Just For Suckers

[Optional]

Shamelessly copying this example from the recent Pinnacle article "The Art of Multiple Betting"



Let’s take the following example. You have €200 to play with and want to place them on two games. You think you have a 50% of winning each individual bet.

The bookmaker currently has them both priced at 2.10 (+110) for regular betting, and 2.09 (+109) for multiple betting. So your options are:


A) Place €100 on each game at 2.10
or
B) Place a €200 multiple at 2.09² = 4.368


In the first case you will end up with:



Expected profit for Option A

25% x (220+10+10-200) = 10 units, or an ROI of 10/200 = 5%


If we do the same math with the multiple we end up here:




Expected profit for Option B

25% x (673.60-200-200-200) = 18.4 units, or an ROI of 18.4/200 = 9.2%



This shows that if you have an edge in each of the wagers you place, you can easily upset the additional charges the bookmakers are applying to place a multiple.

[Barrakuda]

As with the stock market, though, you pay a price for higher returns in the form of increased volatility of returns. Taken to an extreme, let's say you had the chance to place 10 +EV $100 bets at even money or 1 +EV $1,000 parlay at 1,000-1 odds. Even if your ROI is higher in the latter bet, you're taking on a ton more risk by sizing the longshot bet so aggressively.

Short version: large odds will always amplify your calculated ROI, but the risk level is not comparable. Implying that one can offset the extra vig by simply adding leverage is pretty misleading IMO.

[jbayko]

As with the stock market, though, you pay a price for higher returns in the form of increased volatility of returns. Taken to an extreme, let's say you had the chance to place 10 +EV $100 bets at even money or 1 +EV $1,000 parlay at 1,000-1 odds. Even if your ROI is higher in the latter bet, you're taking on a ton more risk by sizing the longshot bet so aggressively.

Short version: large odds will always amplify your calculated ROI, but the risk level is not comparable. Implying that one can offset the extra vig by simply adding leverage is pretty misleading IMO.

This is true. Another important point is that, just as parlays will amplify positive edges and increase ROI, they will also amplify negative edges and decrease ROI when you're getting it wrong. That is why sportsbooks love parlays so much. The majority of bettors are net negative ROI players, and parlays are going to amplify that negative ROI for an even greater profit. Well, another reason books love parlays is because of your above stated higher volatility. Many bettors don't follow very good bankroll management, and therefore, higher volatility is going to cause those players to go bust at an even greater rate than without. Going bust generally leads to more deposit $.

With that being said, I've recently realized that I probably haven't been leveraging parlays as much as I should. I'm going to start playing them more when I have situations where I'm fairly confident that I have a significant edge.

At the end of the day, I definitely believe the rule of thumb of "parlays are bad" is a good one for novice bettors. They should really get their feet wet with singles to get a solid understanding of the basics first, build a deep betting history so they understand where where their skills lie and if they're even profitable. They should only move onto parlays once they have a firm grasp of what they're doing.

[Pareto]

Unless the games are played at exactly the same time it would be smarter to just bet 200 dollar on the first outcome at 2.1 and then place all the original stake + winnings on the second game also at 2.1.

This would give you the following payout: (200*2,1) *2,1 - 200 = 682

Which is higher than the parlay payout of 673,6.

In my opinion the only thing parlays are good for is circumventing limits at soft books.

[jjgold]

some swear by 2 team parlays it all comes down to math and odds

Sharps find a way to use it to their advantages

[Spacefrog]

Unless the games are played at exactly the same time it would be smarter to just bet 200 dollar on the first outcome at 2.1 and then place all the original stake + winnings on the second game also at 2.1.

This would give you the following payout: (200*2,1) *2,1 - 200 = 682

Which is higher than the parlay payout of 673,6.

In my opinion the only thing parlays are good for is circumventing limits at soft books.

Plus, if you are running a rollover, betting the parlay would just count 200 dollar for the said rollover, while doing separate bets would count as 200 + 200*2.1, and this is a huge difference.

[Spacefrog]

There is something to retain from the original post.

If you can get a slightly better odd (2.1 from 2.09) then your ROI will just skyrocket (9.2% from 5%).
That's why line shopping is VERY IMPORTANT

[HeeeHAWWWW]

The problem here is that if the appropriate stake for singles is $100 each, the correct stake for the parlay is going to be a fair bit less: $61 at half-Kelly. Expected growth then ends up almost double when you go down the singles route, about 0.17% vs 0.09%.

if you're bumping up against stake limits parlays can make some sense, if your book limits based on the risk side rather than to win.

[Optional]

Several great replies in here. I've learned.

[jbayko]

The problem here is that if the appropriate stake for singles is $100 each, the correct stake for the parlay is going to be a fair bit less: $61 at half-Kelly. Expected growth then ends up almost double when you go down the singles route, about 0.17% vs 0.09%.

if you're bumping up against stake limits parlays can make some sense, if your book limits based on the risk side rather than to win.

This is a really good point. Me and another poster commented earlier about the high variance issue, but we didn't take the conversation to this next obvious step in logic. The graphic in the OP assumes some form of flat betting, which is sub-optimal.

[Shutup]

I won a 5 team parlay a few days ago. Almost won a 9 team parlay(won 8 of 9) And just won a 7 teamer. Pissed though. My bets play lost. I went 7-1 and lost money. That is gambling for ya. Small money on the parlay unfortunately

ONLINE 03/07/2018 10:42 AM

[ # 354436582 ] PARLAY (7 TEAMS) ( Risking: 1.00 - To Win: 78.76 ) WIN 03/07/2018 @ 07:15 PM NBA [561] Utah Jazz +1-115 Score: Utah Jazz(104) - Indiana Pacers(84) WIN 03/07/2018 @ 08:15 PM NBA [568] Detroit Pistons +5.5 -110 Score: Toronto Raptors(121) - Detroit Pistons(119) WIN 03/07/2018 @ 10:45 PM NBA [573] Orlando Magic +7-115 Score: Orlando Magic(107) - Los Angeles Lakers(108) WIN 03/07/2018 @ 12:10 PM CBB [575] Louisville +2-112 Score: Louisville(82) - Florida State(74) WIN 03/07/2018 @ 03:15 PM CBB [598] Colorado +7-115 Score: Arizona State(85) - Colorado(97) WIN 03/07/2018 @ 07:10 PM CBB [622] Georgia -130 Score: Vanderbilt(62) - Georgia(78) WIN 03/07/2018 @ 09:40 PM CBB [627] Iowa State +6-110 Score: Iowa State(64) - Texas(68) WIN