A common myth surrounding professional gamblers is that we don't parlay, but a more accurate assessment would be that we don't parlay often. An equally true statement is that we love parlays. We love them because the odds are incredibly in our favor.
Sportsbooks also love parlays because they make way more vig on parlays than on straight wagers. Sound strange? How can a proposition be both hugely favorable to books and professional gamblers at the same time? Let me explain.
While most sportsbooks struggle to achieve the Theoretical Hold Percentage of 4.55 percent on straight wagers, three-team parlays routinely achieve Practical Hold Percentages over 12 percent.
Basically, you're paying at 6-1 on a proposition with true odds of 7-1. Assuming oddsmakers have made a reasonably effective pointspread, or assuming bettors typically pick correctly 50 percent of the time (both of which are true statements), it is easy to see why sportsbook managers encourage parlays. Nothing gets your hold percentage up like a healthy diet of parlay action.
Here's the math:
((7+1) - (6+1)) / (7+1) = (8-7) / 8 = 12.5%
If the bookie math is throwing you, consider from a player's perspective that a three-team parlay has eight possible outcomes, seven which favor the house and one which favors the player. Hence the true odds of 7-1. However, the standard pay out for a three-team parlay is 6-1.
That overlay (the difference between the payoff and the true odds) is the house vig. One full point overlay on eight possible outcomes, or 1/8 equals 12.5 percent. That's the house commission on three-team parlays. As you add teams to your parlay, the theoretical hold for the house skyrockets as follows.
No. of Teams | Actual Odds | Sportsbook Payout | Theoretical Hold |
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% |
9 | 511/1 | 300/1 | 41.21% |
10 | 1027/1 | 700/1 | 31.54% |
So how can professional gamblers thrive in this environment? Easy. All of the above numbers assume that the player hits 50 percent of his selections, but professional gamblers wouldn't be professional gamblers if we only hit 50 percent of our selections. We need to hit nearly 53 percent to break even and closer to 58 percent to make a living.
For example, our 2003 NFL Program hit 61 percent this season. That changes the Parlay Match drastically. Compare your Average Joe parlaying his 50 percent selections against our 61 percent selections:
Joe Public's NFL (.50 X .50 X .50) = 12.5%
Brian Gabrielle NFL (.61 X .61 X .61) = 22.7%
We have now taken the advantage away from the house and actually secured a 6-1 payoff against true odds better than 5-1. We can further increase the advantage by focusing on the very highest percentage plays in our arsenal. For example, our Football Feature Games of the Year are 50-20 (71 percent). Have a look at this math:
Brian Gabrielle Football GOY's (.71 X .71 X .71) = 35.8%
Stunning. We have now taken the advantage away from the house and actually secured a 6-1 payoff against true odds better than 3-1.
Professional gamblers love to parlay because the odds are so tremendously stacked in our favor. It's the same reason that a lot of sportsbooks won't take our action, and those that do limit us or watch us very carefully.
The reason we don't parlay very often is not because the odds are stacked against us. It's because the opportunity arises so infrequently. To reduce our risk we only want to parlay our strongest plays together, but high octane plays just don't come along in bunches. For example, we released just 16 College Football Feature Games this season, and that was spread out from August until December.
Parlays are also are a fantastic vehicle for liability management. This is especially true with hockey and baseball moneylines, where there may be several big prices we like in the same day but are unwilling to risk 12 units to win three. Obviously, all three would be high percentage plays but we can use the math to our advantage by parlaying the three in an even-money situation and eliminating the enormous liability involved in playing the three straight.
Even a 2-1 showing on straight bets would represent a two-unit loss in this situation, and the worst-case scenario (-12 units) could be devastating to one's bankroll. So here is a situation where the parlay can be a nice defensive weapon in one's arsenal in addition to being a high-powered offensive machine.