Parlay

A parlay, accumulator (or acca), combo bet, or multi is a single bet that links together two or more individual wagers, usually seen in sports betting.  Winning the parlay is dependent on all of those wagers winning together.  If any of the bets in the parlay lose, the entire parlay loses. If any of the plays in the parlay ties, or "pushes", the parlay reverts to a lower number of wagers with the payout odds reducing accordingly.  Parlay bets are high-risk, high-reward; linking the possibilities drastically reduces the chance of the bet paying off overall.  The benefit of the parlay is that there are much higher pay-offs, although as usual, casinos and bookkeepers offering parlays often exploit the poor calculation of gamblers by not increasing the pay-out as much as the odds truly demand, with the effect of the house edge increasing in parlays.

Although a variety of bets can be used to build a parlay bet, correlated parlays are usually not allowed at betting sites. Correlated parlays are two or more bets from the same game that rely on a closely related outcome: for example, betting that a football (soccer) team might both score more than three goals in a match, and also win the match.  These are not independent events, as a team that scores more than three goals is also very likely to win the match.  A naive application of odds that treated these events as uncorrelated would not accurately reflect the probability of the linked bet.

Odds and payout
Parlay bets are paid out at odds higher than the typical single game bet, but still below the "true" odds. For instance, a common two-team NFL parlay based entirely on the spread generally has a payout of 2.64:1. In reality, however, if one assumes that each single game bet is 50/50, the true payout should instead be 3:1.

Examples

Typical payouts for up to 10 team parlay bet
The following is an example of a traditional Las Vegas Parlay Card, which shows the typical payouts for an up to 10 team parlay bet based on −110 prices (amount won is assuming $100 is bet):

Profitability of parlays in sports betting
Many gamblers have mixed feelings as to whether or not parlays are a wise play. The best way to analyze if they are profitable in the long term is by calculating the expected value. The formula for expected value is:  . Since the probability of all possible events will add up to 1 this can also be looked at as the weighted average of the event. The table below represents odds.

Column 1 = number of individual bets in the parlay

Column 2 = correct odds of winning with 50% chance of winning each individual bet

Column 3 = odds payout of parlay at the sportsbook

Column 4 = correct odds of winning parlay with 55% chance of winning each individual bet

The table illustrates that if a 55% chance of winning each individual bet were achievable, parlays would be profitable in the long term. Compare the expected value received on an individual bet at a typical price of −110 with a 55% chance of winning: ((100/110+1)*.55)−1 = .05 (exactly 5 cents won for every dollar bet on average), multiplied by 11 = .55, to the expected return on the 11 game parlay ((1234/717.8)−1) = .719 (72 cents won for every dollar bet on average).  In this case a parlay has a much higher expected value than individual bets with greatly increased variance in outcomes.

See also
Full cover bet
Trixie (bet)
Each-Way (bet)
Progressive parlay

References

Wagering
Sports betting