top of page
Search

Parlay Betting Explained: How Payouts Work and Why Odds Multiply

  • Writer: Greg Kajewski
    Greg Kajewski
  • 4 hours ago
  • 13 min read

Parlay betting combines multiple wagers into one, where all selections must win for a payout. It’s popular because it offers higher payouts compared to single bets, but it also comes with much higher risks. Here’s the key takeaway:

  • How it works: Combine bets (e.g., spreads, totals, moneylines) into a single wager. If one leg loses, the entire parlay fails.
  • Payouts: Odds are multiplied, creating larger potential returns. For example, three -110 bets combined could yield nearly 6.97-to-1 odds.
  • Risks: Adding more legs lowers your chances of winning significantly. A 5-leg parlay might pay 24-to-1 but has only a 3.125% chance of success.
  • Pushes: If a leg results in a tie, it’s removed, and the odds adjust accordingly.
  • Strategy: Stick to 2-3 legs, manage your bankroll, and research thoroughly to improve your chances.

Parlays are enticing for their lottery-like payouts, but they require careful planning to avoid losses. Platforms like BettorEdge offer tools to enhance your strategy by providing better odds and social features. Always weigh the risk and reward before diving in.


THIS is the Most Profitable Parlay Betting Strategy!


How Parlay Bets Work

Parlay bets offer the chance for impressive payouts, but to take full advantage, it’s crucial to understand how they work. Let’s break down how to combine bets, handle specific outcomes like pushes, and the types of bets you can include in a parlay.


Combining Bets Into a Parlay

A parlay bet combines two or more individual wagers - known as legs - into a single bet. To create one, select your bets, then use your sportsbook’s bet slip to combine them. The platform will automatically calculate the overall odds for your parlay. At least two legs are required, but you can often add several more, depending on the sportsbook.

Some platforms also offer Same Game Parlays (SGP), which allow you to combine multiple bets from a single game. To place an SGP, select the option, choose your bets, set your stake, and confirm your wager.

Example: Imagine a multi-sport parlay that includes:

For the parlay to win, these outcomes must happen.


What Happens With Pushes

Pushes, or ties, are an important aspect of parlay betting. If one leg of your parlay results in a push, that leg is simply removed from the bet, and the parlay continues with the remaining legs. For instance, if a four-leg parlay includes one push, it effectively becomes a three-leg parlay with recalculated odds and a reduced payout.

However, keep in mind that if leg of your parlay loses, the entire bet is considered a loss. Pushes are common with wagers like point spreads and totals, so it’s worth factoring this into your strategy.


Types of Bets You Can Include

Parlays give you the flexibility to mix different types of bets. Common options include spreads, totals, and moneyline wagers, which can be combined across multiple games or even different sports. This variety allows you to diversify your bets, though careful planning is key to reducing risk.

There are restrictions, though. Correlated plays - where one outcome directly impacts another - are typically not allowed. For example, you can’t pair a team’s moneyline with its spread in the same game. Some sportsbooks may allow correlated events but adjust the odds to reflect the overlap.

Same-game parlays also come with specific rules. For example:

  • An MLB same-game parlay might require the Cardinals to win, the total score to exceed 7.5 runs, and a specific player to hit a home run.
  • In an NBA same-game parlay, you might bet on the Philadelphia 76ers winning by more than 1.5 points, the total points exceeding 209.5, and a player reaching a certain number of assists.

If you’re just starting out, it’s wise to stick with 2- or 3-leg parlays to increase your chances of success. Always research teams, players, and matchups thoroughly before placing your bets.


How to Calculate Parlay Payouts

Once you understand how parlay bets work, the next step is learning how to calculate payouts. While sportsbooks handle the math for you automatically, knowing how to do it yourself can give you more confidence and control over your betting strategy.


Step-by-Step Payout Calculation

The process of calculating parlay payouts involves converting American odds into decimal odds and multiplying these values together. Here's how it works:

Step 1: Convert American Odds to Decimal Odds

  • For positive odds (e.g., +120): Divide the odds by 100 and add 1. For instance, +120 becomes (120 ÷ 100) + 1 = 2.2.
  • For negative odds (e.g., -150): Divide 100 by the absolute value of the odds and add 1. For example, -150 becomes (100 ÷ 150) + 1 ≈ 1.667.

Step 2: Multiply All Decimal Odds TogetherOnce you've converted the odds, multiply them to get the combined odds. This step highlights why parlay payouts increase so much with each additional leg.

Step 3: Calculate Your Total PayoutTake your stake and multiply it by the combined odds to find the total payout. To determine your net profit, subtract your original stake from this amount.

Let’s see how this works with some real-world examples.


Payout Examples

Here are a few scenarios that show how different combinations of bets can impact your winnings:

Three-Leg NBA ParlayImagine you bet on three NBA teams - Warriors, Lakers, and Miami Heat - each with -110 odds:

  • Convert -110 to decimal: 1.91
  • Combined odds: 1.91 × 1.91 × 1.91 = 6.96 (or +596)
  • A $100 bet would return $696, with a net profit of $596.

This example shows how combining modest odds can lead to a payout close to 6-to-1.

Three-Leg NFL Moneyline ParlayNow consider a parlay with three NFL favorites:

Combined odds: 1.333 × 1.5 × 1.667 = 3.33 (+233)A $100 wager would return $333, leaving you with a $233 net profit.

Four-Leg NBA ParlayAdding more legs to a parlay can dramatically increase the payout, as shown here:

Combined odds: 2.2 × 1.91 × 2.45 × 3.0 = 30.87 (+2987)A $100 bet would return $3,087, with a net profit of $2,987 if all four legs hit.


BettorEdge Features for Parlays

BettorEdge takes parlay betting a step further as it allows for you get the best odds on your parlay or even act as the house for a parlay! Their peer-to-peer betting model eliminates the high vig, often giving you better odds on individual bets. When these odds are multiplied in a parlay, the potential payout can be even higher.

You can also use the custom odds feature to create parlay combinations that align with your predictions. If you think certain outcomes are undervalued, BettorEdge makes it easier to capitalize on those opportunities.

Another standout feature is bet selling. On BettorEdge, if some legs of your parlay win early, you can sell your position back to the community at a price you choose. This gives you the chance to lock in profits before all the events in your parlay are completed.

Additionally, BettorEdge's social tools let you follow experienced bettors, analyze their parlay strategies, and even copy bets that match your risk level. This transparency can help you refine your own approach and make smarter decisions.


Why Odds Multiply in Parlays

Parlay odds multiply because the probabilities of independent events combine, which drastically lowers the overall chance of winning.


The Math Behind Multiplying Odds

Here’s a simple example: if you have a 50% chance of winning one bet and another 50% chance of winning a second bet, your chance of winning both isn’t 100% - it’s just 25% (0.5 × 0.5 = 0.25). In parlay betting, every selection must win for the bet to pay out. To calculate the total payout, sportsbooks multiply the odds of each selection (often converted from American to decimal format).

For instance, let’s say you place a parlay with three point spreads, each at -110 odds (which converts to 1.91 in decimal). When you multiply these odds together (1.91 × 1.91 × 1.91), the result is approximately 6.97. So, a $10 wager on this parlay would yield a total payout of about $69.70, giving you a net profit of $59.70.


Risk vs. Reward in Parlays

This multiplication of odds creates a sharp increase in both risk and reward. Adding more legs to a parlay dramatically lowers the probability of winning, which is why sportsbooks offer higher payout ratios to balance the higher risk. For example, a two-leg parlay with -110 odds typically pays around 2.6-to-1, while a three-leg parlay can pay roughly 6-to-1. Even with modest individual odds, combining them in a parlay can lead to impressive payouts - but at the cost of a steep drop in your chances of success.


Comparing Risk and Reward

To better understand how parlay odds work, let’s break it down with a table showing various scenarios for bets at -110 odds:

Number of Legs

Combined Decimal Odds

American Odds

Payout Ratio

Approximate Win %

$100 Bet Payout

1

1.91

-110

1.91-to-1

52.36%

$191

2

3.65

+265

2.65-to-1

27.5%

$365

3

6.97

+597

5.97-to-1

14.4%

$697

4

13.31

+1231

12.31-to-1

7.5%

$1,331

5

25.42

+2442

24.42-to-1

3.9%

$2,542

This table highlights how quickly payouts grow with each additional leg but also how much the win probability plummets. A five-leg parlay, for example, offers a payout of 24-to-1, but the likelihood of winning is only about 4%.

Understanding this dynamic is key to deciding whether a parlay bet is worth the risk. While the potential payouts can be tempting, the sharply reduced odds of success mean you need to carefully weigh your options. The multiplication of odds makes parlays exciting but risky, emphasizing the importance of managing your bets wisely - a topic we’ll dive into next.


Managing Risk and Getting Better Value

Parlay betting isn't about eliminating risk completely - it’s about managing it wisely while aiming for the best possible returns. The trick lies in adopting a disciplined approach that balances the thrill of big payouts with solid betting strategies.


Best Practices for Parlay Betting

Successful parlay bettors stick to a few key principles to improve their chances over time. First, keep your parlays to 2 or 3 legs whenever possible. While longer parlays promise huge payouts, they’re more like lottery tickets with poor odds. A well-thought-out 3-leg parlay, based on solid matchup analysis, offers better chances than a random 7-leg gamble.

Bankroll management is essential - limit your stake to 1–2% of your total bankroll for any single parlay. This helps protect you from significant losses and keeps you in the game for the long haul.

Focus on bets with positive expected value (+EV) for each leg of your parlay. This means doing the research to find situations where the odds are in your favor, instead of relying on gut feelings or picking favorites. Logical, data-driven decisions are key.

Correlated parlays can also be a smart move. These involve bets that are logically connected - like wagering on a high-scoring game and also betting on a quarterback to exceed passing yard expectations. Keep in mind, though, that sportsbooks often adjust payouts for obvious correlations, so look for subtle connections they might overlook.

Another useful tactic is hedging on the final leg of your parlay. This means betting the opposite side of your last selection to secure a profit or reduce potential losses. A hedge calculator can help you figure out the optimal hedge amount.

Finally, shop around for the best odds and avoid following public betting trends blindly. Different sportsbooks often offer varying lines, and finding the best ones can make a big difference in your payout. It’s also wise to wait for team confirmations, especially in leagues like the NBA where "load management" can impact lineups.

By following these practices, you can set the stage for using tools like BettorEdge to refine your parlay betting strategy.


Using BettorEdge to Improve Your Strategy

BettorEdge offers a no-vig marketplace, allowing you to build parlays with better odds. Unlike traditional sportsbooks, which take a 4.5% cut on single bets (and up to 16% on parlays), BettorEdge lets you set your own odds and trade directly with other bettors. This peer-to-peer model significantly improves your chances of being profitable compared to standard sportsbooks.

The platform’s analytics dashboard covers major sports like the NFL, NBA, MLB, UFC, and NCAA. It provides detailed insights to help you identify +EV opportunities for each leg of your parlay. You can also track your betting history to see where you’re succeeding and where adjustments are needed.

BettorEdge also features social trading tools, letting you follow experienced bettors and study their parlay strategies. You can view real-time wagers, community metrics, and trends that might uncover angles you hadn’t considered. The platform’s transparency allows you to learn from both the wins and losses of others.

Another helpful feature is the competitions tool, which lets you test your parlay strategies in a controlled environment. With automated tracking and settlement, you can practice refining your approach without risking too much of your bankroll.

When paired with disciplined bankroll management, these tools can help you optimize your parlay strategy.

"Sports books by default, love parlays. They think parlays are a sucker bet. If you walk in the door and you're betting a lot of parlays, they just assume you're a sucker. If you parlay positive-EV plays together, you're not a sucker and they think you are. You can slip a few positive-EV parlays in there and disrupt their profiling." – Captain Jack Andrews

Common Mistakes to Avoid

Even with the right strategies, it’s important to avoid common errors that can derail your efforts.

One of the biggest mistakes is overloading parlays with too many legs. For example, the breakeven percentage for a two-leg parlay with each leg at -110 is 27.4%. Add a third leg, and it drops to just 14.4%. Every additional leg drastically reduces your winning odds.

Don’t chase losses with oversized parlays. After a tough loss, it’s tempting to try to win back your money with a massive ticket. This emotional betting often leads to even bigger losses.

Avoid picking parlay legs based solely on hunches or favoritism. While it might work occasionally, it’s not a sustainable strategy. Each leg should be backed by strong analysis and clear value.

Another common error is treating parlays as your primary betting strategy. While parlays can be profitable when used sparingly, single bets are generally a more reliable way to grow your bankroll. Think of parlays as a strategic supplement, not your main focus.

"The typical bettor is betting into negative-EV situations, and they are compounding that edge and making it harder for themselves to win in the long run." – Captain Jack Andrews

Lastly, pay attention to line movement and market timing. Odds change for a reason, and successful bettors know how to time their wagers. Don’t rush into placing parlays - wait for the right opportunities and the best available lines.


Conclusion

Parlay betting presents an exciting opportunity to amplify your winnings by combining multiple bets into a single wager. The magic lies in how the odds multiply rather than simply adding up. By converting American odds to decimal format, multiplying each leg's decimal odds, and then applying your stake, you can see how the payouts grow. For example, a $100 bet with three winning legs could yield nearly $600 - an enticing return.

However, it’s important to keep in mind that these higher payouts come with increased risk. Adding more legs to your parlay significantly lowers your chances of winning. That’s why many experienced bettors stick to two or three legs to strike a balance between risk and reward.

Discipline and smart bankroll management are essential for long-term success with parlays. Limiting your parlay bets to a small portion of your total bankroll - around 1–2% - and focusing on wagers that offer positive expected value can help you stay consistent and avoid emotional decisions like chasing losses.

If you’re looking to refine your strategy, BettorEdge’s no-vig marketplace provides a compelling alternative to traditional sportsbooks. Unlike sportsbooks, where the house edge on parlays can climb to around 16%, BettorEdge’s peer-to-peer model offers better odds, detailed analytics, and social trading tools to identify profitable opportunities. With betting exchanges boasting a user profitability rate of over 40% - compared to just 2% at traditional sportsbooks - you’re far more likely to find success with BettorEdge’s approach.


FAQs


How can I calculate the payout for a parlay bet if my sportsbook doesn’t show the odds automatically?

To figure out a parlay payout manually, start by converting each bet's odds into decimal format. Once you have the decimal odds, multiply them all together. Then, take that result and multiply it by the amount you're wagering. To find your net profit, simply subtract your original stake from the total payout.

Here’s an example: Let’s say the decimal odds for your bets are 2.5, 3.0, and 2.0. Multiply these together, and you get 15. If you place a $50 wager, your total payout would be $750 (15 × $50). After subtracting your $50 stake, your net profit would be $700.

This approach provides a straightforward way to estimate your potential winnings, giving you a better grasp of both the risks and rewards involved in parlay betting.


What are the best strategies to win more with parlay bets while minimizing risks?

To give yourself a better shot at success with parlay bets while keeping risks in check, start by sticking to smaller parlays - ideally with just 2 or 3 legs. These smaller combinations strike a good balance between risk and reward, unlike larger parlays that increase the odds but also the risk of losing.

Another smart move is to diversify your bets. Mix in different sports or outcomes to lower the chance of all your bets being impacted by a single event or trend. Alongside this, practice responsible bankroll management: set a clear budget, stick to it, and resist the urge to chase losses. This approach not only protects your finances but also keeps betting enjoyable and sustainable over time.

Parlay bets are inherently risky, so focus on making thoughtful, calculated choices that maximize potential value without stretching yourself too thin.


Why do sportsbooks change the odds for related bets in parlays, and how does this affect my payout?

Sportsbooks tweak the odds for correlated bets in parlays because the outcome of one bet can directly impact the likelihood of another. Take this example: you place a bet on a team to win and another on the total points to exceed a specific number. These bets are intertwined - if the team plays exceptionally well, the chances of the total points hitting the over increase. If sportsbooks didn’t adjust for this, they’d expose themselves to a higher risk of consistent losses.

To address this, sportsbooks lower the potential payouts for correlated bets compared to unrelated ones. This adjustment helps maintain balance and prevents bettors from exploiting these connections for guaranteed profits. While it might reduce the size of your payout, it reflects the added risk sportsbooks take when dealing with linked outcomes.


Related posts

bottom of page