How Sportsbooks Profit Off Parlays [+ Tips to Beat the Odds]

Greg Kajewski
4 days ago
12 min read

Parlays are a sportsbook’s best friend - and a bettor’s biggest trap, but what if you could take the house side? It’s be a game changer as you wouldn’t be forced to rely on the only option being a huge payouts for a small wager and the odds stacked heavily against you. Sportsbooks profit more from parlays than single bets, with profit margins reaching 20–30% compared to just 4–5% for single bets. The math is simple: the more legs you add, the higher the house edge grows. For example, an 8-leg parlay has a house edge of over 40%.

Key Takeaways:

Parlays made up 27% of bets in some states in 2024 but accounted for 72.5% of sportsbook revenue in New Jersey.
Sportsbooks underpay parlays compared to their true odds, increasing their profits.
Single bets are less risky and have a smaller house edge.

How to Bet Smarter:

Focus on single bets or limit parlays to 2–3 legs.
Use peer-to-peer platforms like BettorEdge to avoid sportsbook fees or even act as the house on a parlay.
Track your bets and use analytics tools to refine your strategy.

Understanding the math behind parlays can help you make better decisions and reduce losses. Stick to smarter betting strategies to avoid falling into the parlay trap.

How Parlays Work and Their Built-In House Edge

What Are Parlays?

A parlay combines several individual wagers into a single bet, and it only pays out if every single pick in the parlay is correct. For example, you might bet that the Lakers win their game, the total points scored exceed a certain threshold, and a specific player hits a scoring milestone. If even one of these predictions is wrong, the entire parlay loses.

This high-risk, high-reward structure is what makes parlays so appealing. Bettors are drawn to the potential for massive payouts from relatively small wagers. But there’s a catch: every additional "leg" (or individual bet) increases both the potential payout and the house's edge.

Aspect	Single Bet	Parlay Bet
Number of Outcomes	One	Multiple (legs)
Win Requirement	One correct pick	All legs must win
House Edge	~4.54% at a Book (or 0% on BettorEdge)	Increases per leg
Risk Level	Lower	Higher
Payout Potential	Lower	Much higher

How the House Edge Compounds

Sportsbooks design parlays in a way that significantly increases their edge as you add more legs. Every additional pick decreases your chances of winning while boosting the sportsbook's advantage.

Take a two-leg parlay as an example. The true odds of both picks hitting are 3:1, meaning a 25% chance of success. However, sportsbooks often pay out at odds closer to 2.6:1, giving them a noticeable edge. The more legs you add, the wider this gap becomes:

2 legs: 8.88% house edge
4 legs: 16.97% house edge
6 legs: 24.35% house edge
8 legs: 31.07% house edge

For instance, a five-leg parlay should mathematically pay 31:1 based on true odds. Instead, sportsbooks typically offer a payout closer to 24:1. That difference? It’s pure profit for the house.

True Odds vs. Offered Odds

The gap between true odds and the odds sportsbooks actually offer is where they make their money. True odds represent the real mathematical likelihood of all your picks hitting. Offered odds, on the other hand, are deliberately adjusted lower to ensure the house profits over time.

Here’s a comparison to illustrate this:

# of Teams	True Odds	Offered Odds (Las Vegas)	House Edge
2	3/1	2.6/1	10.00%
3	7/1	6/1	12.50%
4	15/1	10/1	31.25%
5	31/1	20/1	34.38%
6	63/1	40/1	35.94%
7	127/1	75/1	40.63%
8	255/1	150/1	41.02%

The pattern is clear: as you stack more legs onto your parlay, the offered payout becomes less and less aligned with the true odds. That tempting 10-leg parlay with 700:1 odds? Based on actual probability, it should pay over 1,000:1. This systematic underpayment is why parlays are among the most profitable bets for sportsbooks. They’re thrilling for bettors but designed to heavily favor the house.

The Only Way To Actually Win Consistently With Parlays In Sports Betting

Why Parlays Are Goldmines for Sportsbooks

Sportsbooks love parlays - and for good reason. These multi-leg bets combine higher risks for bettors with significantly larger profits for the house. The secret lies in the way the house edge compounds across multiple wagers.

High Hold Percentage and Profit Margins

On single bets, sportsbooks typically hold about 4–5% of the money wagered. But with parlays, that percentage jumps dramatically, often reaching 20–30% or more. To put it simply, for every $100 placed on parlays, sportsbooks pocket around $20–30, compared to just $4–5 on straight bets.

Market data consistently back this up. For instance, in Nevada, which offers some of the most detailed historical data, sportsbooks have maintained a staggering 30.97% win rate on parlays since 1984. Compare that to their 5.6% win rate on all other sports bets, and it’s clear why parlays are so enticing for operators.

"Sportsbooks make a 30 percent profit on parlays vs. five or six percent with straight bets." - Jeff Edelstein, Senior Analyst at USBets

This massive profit margin explains why sportsbooks promote parlays so heavily. From same-game parlays to boosted odds on multi-leg bets, these offerings are designed to rake in profits at rates five or six times higher than single bets. And it’s not just the math - sportsbooks also capitalize on bettors’ psychology to make parlays nearly irresistible.

Bettor Psychology and the Appeal of Big Wins

It’s no accident that parlays are so popular. Sportsbooks tap into psychological biases that make the idea of turning a small wager into a huge payout incredibly tempting. The risk-reward dynamic plays on our natural desire for big wins, and with digital betting apps offering round-the-clock access, these triggers are more potent than ever.

As Heather Wardle, a policy researcher at the University of Glasgow, points out:

"The features that make these products exciting and engaging are also the features that make them addictive."

On top of that, sportsbooks use advanced data analytics to nudge bettors toward parlays. Personalized promotions and flashy offers are carefully crafted to steer users toward these high-margin bets. The financial consequences are real, too. A 2024 survey revealed that four years after a state legalizes online sports betting, average credit scores drop by 1%, and bankruptcy filings rise by 25–30%.

Psychologist Jamie Torrance from Swansea University highlights the subtle but powerful influence of these promotions:

"They're on their way to work, and the person who works in their favorite pub or bar comes out and says, 'I have a free shot of tequila; please have it....' It's going to be very hard for that person to deny that."

Comparison: Parlays vs. Single Bets

Here’s how parlays stack up against single bets:

Factor	Single Bets	Parlays
Sportsbook Hold %	4–6%	20–30%
Bettor Win Rate	~50% (with skill)	Decreases exponentially
Psychological Appeal	Moderate	High (big payout potential)
Risk Level	Lower	Substantially higher
Bankroll Impact	Gradual	Can quickly deplete
Long-term Profitability	Possible for skilled bettors	Nearly impossible

While skilled bettors can sometimes overcome the modest house edge on single bets through careful analysis and smart bankroll management, parlays are a different story. The compounded edge makes it nearly impossible to profit consistently over the long term. That’s why experts always recommend focusing on single bets, even as sportsbooks push parlays through aggressive marketing and prominent placement in betting apps.

Tips to Reduce Losses and Beat the Odds

Now that you know how sportsbooks stack the odds in their favor - especially with parlays - it’s time to fine-tune your betting strategy. Here are three practical ways to reduce your losses and improve your overall results.

Stick to Single Bets and Be Selective with Parlays

Single bets generally come with a smaller house edge compared to parlays, which increase your risk with every added leg. By focusing on single bets, especially in games where you feel confident about the outcome, you minimize the chances of losing your entire wager on one bad result.

If you can’t resist the temptation of parlays, use them sparingly. Keep them short - no more than two or three legs - and combine bets that make logical sense together. For example, if you’re expecting a high-scoring game, you could pair an on total points with a bet that both teams will score.

Another way to save money? Skip the vig by exploring peer-to-peer betting.

Try Peer-to-Peer Betting Platforms

Traditional sportsbooks charge a vig, which is essentially a fee. This often means risking $110 to win $100, raising the bar for breaking even. Peer-to-peer platforms, like BettorEdge, let you bet directly with other users, cutting out the vig. Without this fee, your break-even win rate drops from 52.4% to 50%.

Here’s how the two approaches compare:

Aspect	With Vig	Without Vig
Break-even Win Rate	52.4%	50.0%
True Probability Display	Inflated	Accurate
Average Returns	Lower	5-10% Higher

BettorEdge offers a no-vig model where free users can place bets up to $100 monthly, and premium members can bet up to $750 monthly, with just a small 1.5% fee beyond those limits. Plus, you can set your own odds and adjust pricing, giving you more control over your bets.

Lastly, to keep improving, you need to track your bets and learn from your results.

Use Analytics Tools to Monitor Performance

Tracking your bets is key to spotting patterns in your strengths and weaknesses. Start with basic tools like those from ActionNetwork, which provide clear insights into your win rate and return on investment (ROI).

For more in-depth analysis, platforms like SolvedSports allow you to create custom models using machine learning, while Props.cash specializes in player prop data and boasts a 4.6/5 rating from nearly 1,000 users. These tools can give you a deeper understanding of your bets, but success ultimately comes down to using this data to develop a disciplined strategy.

BettorEdge also includes built-in analytics to break down your performance, helping you make quick adjustments to stay on top of your game.

Smarter Parlay Methods for BettorEdge Users

BettorEdge has introduced tools that can help bettors approach parlays with a more strategic mindset. With its no-vig marketplace and social betting features, the platform offers ways to uncover better value while reducing some of the typical drawbacks associated with traditional parlay betting.

Limit Legs and Focus on Correlated Outcomes

When creating parlays, it’s smart to keep them simple - stick to two or three legs and aim for outcomes that are naturally connected. For example, in a high-scoring basketball game, you might pair an bet on total points with wagers on both teams scoring above their averages. This approach takes advantage of the relationship between outcomes, boosting the likelihood of success.

BettorEdge’s user-set lines feature makes this even easier. You can combine correlated bets and set your own odds, often finding better prices than those offered by traditional sportsbooks. Plus, the no-vig marketplace removes the house edge, giving you access to true odds instead of the inflated ones that typically make parlays so profitable for sportsbooks.

Use Competitions and Head-to-Head Challenges

Another way to refine your parlay strategy is by exploring BettorEdge’s competition features. These let you create custom parlay scenarios with more control and potentially less risk. Instead of traditional bets, you can join private competitions or public contests where your parlay picks compete against others. The goal? Outperform your competitors over a set timeframe, meaning you can still win even if not every leg of your parlay hits.

Head-to-head challenges are another great option. Here, you can negotiate personalized parlay-style bets with other users, setting terms and odds that work for both parties. This peer-to-peer setup eliminates the house edge entirely. BettorEdge handles the tracking and payouts, allowing you to focus purely on strategy.

Analyze Community Trends and Leaderboards

BettorEdge’s social features can provide valuable insights to help shape your parlay strategy. The real-time social feed shows trending bets and popular picks, giving you a sense of where the community sees value. The leaderboards, which highlight top-performing users over 7- and 30-day periods, can also be a goldmine for learning effective strategies from consistent winners.

You can also use community insights to identify opportunities others might overlook. For example, when public opinion heavily favors certain parlay combinations, it might be worth exploring less popular correlations for better odds. BettorEdge’s analytics tools are another asset, helping you track which types of parlays align with your strengths so you can focus on what works best for you.

Platform Feature	Benefit
No-vig Markets	Access better odds
User-set Lines	Find mispriced opportunities
Social Insights	Spot trends and hidden value
Analytics Tools	Track and refine your strategy

Key Features and Tools to Gain an Edge

BettorEdge offers a suite of tools designed to give you a real advantage in parlay betting. These features are crafted to help you refine your strategy and improve your chances of success.

No-Vig Marketplace

With BettorEdge's no-vig marketplace, the traditional house edge is completely removed. Instead of betting against a sportsbook, you’re matched with other users in a peer-to-peer system where you can set your own odds and avoid hefty fees. A 12-month simulation demonstrated the impact of this approach: no-vig betting resulted in a $5,760 gain, compared to an $1,800 loss with an 8% commission - showing a $7,560 net difference. This model contributes to an impressive statistic: 40% of BettorEdge users turn a profit, compared to just 2% on traditional platforms.

Free users can place up to $100 in no-vig bets each month, while Premium members can wager up to $750 before incurring a modest 1.5% fee. Beyond the favorable odds, the platform also provides advanced analytics to help you monitor and improve your performance.

Advanced Bet Tracking and Analytics

BettorEdge’s analytics tools give you a detailed look at your betting performance. You can track key metrics like net profit/loss, return on investment (ROI), average win amounts, your largest single payout, and the value of your active bets. These insights help you identify trends, such as your most profitable periods through ROI timeline charts, or which leagues and bet types yield the best results.

Premium members gain access to even more features, including historical betting data and enhanced BetMatch filters to uncover mispriced opportunities.

Analysis Area	Key Metrics to Track
Sport Performance	Win rates by league
Bet Types	ROI by bet category
Timing	Success rates by day and time
Risk Management	ROI by stake size

These analytics work hand-in-hand with BettorEdge’s social features, encouraging collaboration and competition within the community.

BettorEdge’s social tools provide a unique way to learn and improve. Every bet is shared on a social feed, letting you follow top performers, study their strategies, and adapt your own. Real-time leaderboards showcase users with the best ROI, win percentages, and hot streaks over 7- and 30-day periods.

You can also engage in head-to-head challenges, negotiating custom bets directly with other users. This peer-to-peer feature not only enhances the betting experience but also helps you sharpen your strategies in a secure environment.

Operating legally in 47 states, BettorEdge uses a sweepstakes model with virtual tokens that can be redeemed for cash prizes. This approach ensures compliance while offering users a dynamic and rewarding platform.

Conclusion: Betting Smarter with BettorEdge

Understanding how sportsbooks profit is the first step toward making more informed betting decisions. As we've discussed, these operators thrive on tactics like compounding house edges, enticing payouts, and high hold percentages, especially with parlay bets. Recognizing these strategies allows you to approach betting with a more strategic mindset.

BettorEdge changes the game by removing the built-in disadvantage of traditional sportsbooks through its no-vig marketplace. Here's a striking fact: over 40% of BettorEdge users turn a profit, compared to just 2% on conventional platforms.

The platform doesn't stop there. It offers a robust set of tools to enhance your betting approach. Detailed analytics help you track your performance across different sports, while social betting features connect you with experienced bettors, offering opportunities to learn and refine your strategies. Whether it's limiting parlay legs, focusing on correlated outcomes, or trying head-to-head challenges, BettorEdge provides the tools you need to make smarter, more calculated bets.

BettorEdge's community-driven and transparent model reshapes the betting experience. Instead of wagering against a house that's designed to win, you're participating in a fair marketplace where skill and informed decisions can truly make a difference.

The choice is yours: stick with traditional sportsbooks and their high-edge parlays, or embrace a platform built to support your success. With BettorEdge, you're not just betting smarter - you’re finally betting on your terms.

FAQs

What are the best ways to manage the risks of parlay betting?

Managing the risks of parlay betting starts with keeping your wager size in check. A practical guideline is to bet no more than 1–2% of your total sports betting bankroll on a single parlay. This approach helps safeguard your funds against the higher risks that come with parlays.

It's also wise to limit the number of picks in your parlay. Adding more teams or outcomes may seem tempting for bigger payouts, but it significantly lowers your chances of winning. Smaller parlays with fewer selections can improve your odds. You might also want to mix favorites and underdogs thoughtfully to strike a balance between potential payouts and risk.

Lastly, stick to a disciplined bankroll management strategy and set firm betting limits. Consistency and avoiding spur-of-the-moment decisions can help reduce losses and lead to better results over time.

How can I spot correlated outcomes to improve my parlay bets?

To identify related outcomes in parlay bets, pay attention to events that are likely to impact one another. Take football, for instance - if a team is predicted to rack up a high score, there's a greater chance the total points for the game will surpass the set line. These are called positively correlated outcomes, where one result increases the likelihood of the other.

Spotting these connections takes some effort. You'll need to dig into team performances, player statistics, and past trends. Using advanced tools or diving into data analysis can reveal these links, helping you craft more strategic parlays. However, keep in mind that sportsbooks often tweak the odds on bets with strong correlations. So, always assess whether the potential payout justifies the added risk.

How does BettorEdge reduce the house edge with peer-to-peer betting?

BettorEdge changes the game by cutting out the traditional sportsbook entirely, allowing bettors to place wagers directly against one another. What’s the big difference? Unlike sportsbooks that take a vig (a commission) on bets, this peer-to-peer model offers fairer odds and lower fees.

This approach doesn’t just save you money - it also puts you in the driver’s seat. With no bookmaker’s margin to worry about, you gain more control over your bets, making it easier to spot value and boost your chances of success. BettorEdge creates a level playing field where it’s all about your skill and strategy.