I posted this last year as well, but wanted to post it again for those who weren't here.
Year after year, I keep hearing about the "dangers of parlays", and how bad of a bet they are. For a majority of bettors, that is true. However, it is not true for a select few. Here are the numbers that I came up with. I use a $1 bet for simplicity - obviously most (all?) of you would be risking significantly more.
Straight Bets
-110 Odds
Odds at 40% accuracy = 2 in 5 (40%)
5 bets breakdown: 2 wins (+1.818) 3 losses (-3)
Money breakdown: $5 bet, -$1.182 total
Profit Margin at 40% accuracy = -23.64%
Odds at 50% accuracy = 1 in 2 (50%)
2 bets breakdown: 1 win (+.909) 1 lose (-1)
Money breakdown: $2 bet, -$0.091 total
Profit Margin at 50% accuracy = -4.55%
Odds at 55% accuracy = 11 in 20 (55%)
20 bets breakdown: 11 wins (+10) 9 losses (-9)
Money breakdown: $20 bet, $1 total
Profit Margin at 55% accuracy = 5%
Odds at 60% accuracy = 3 in 5 (60%)
5 bets breakdown: 3 wins (2.727) 2 losses (-2)
Money breakdown: $5 bet, $0.727 total
Profit Margin at 60% accuracy = 14.54%
Parlays
3 team pays 6-1
Odds at 40% accuracy = 8 in 125 (6.4%)
125 bets breakdown: 8 wins (+48) 117 losses (-117)
Money breakdown: $125 bet, -$69 total
Profit Margin at 40% accuracy = -55.2%
Odds at 50% accuracy = 1 in 8 (12.5%)
8 bets breakdown: 1 win (+6), 7 losses (-7)
Money breakdown: $8 bet, -$1 total
Profit Margin at 50% accuracy = -12.5%
Odds at 55% accuracy = 1331 in 8000 (16.64%)
8000 bets breakdown: 1331 wins (+7986), 6669 losses (-6669)
Money breakdown: $8000 bet, +$1317 total
Profit Margin at 55% accuracy = 16.46%
Odds at 60% accuracy = 27 in 125 (21.6%)
125 bets breakdown: 27 wins (+162), 98 loses (-98)
Money breakdown: $125 bet, +$64 total
Profit Margin at 60% accuracy = 51.2%
Let's try to make that pretty:
Straight Bets Parlays
40% -23.64% -55.2%
50% -4.55% -12.5%
55% +5% +16.46%
60% +14.54% +51.2%
So, as you can see, if you are a losing bettor, you will lose more money by parlaying. However, if you are a winning bettor, you will win more money by betting 3 team parlays. Of course, all three picks have to be solid picks - you can't take two picks and randomly choose the third.
Granted, you could hit 60% of your picks and lose in the short term this way. You could also hit 40% of your picks and win. However, over the long run, doing three team parlays at 6-1 odds should improve your winnings if you are a winning bettor.
Standard disclaimer - if you lose all of your money on three team parlays, don't come crying to me. You either aren't winning a high enough percent of picks, or else aren't managing your money well. You have a much better chance of losing 15 3-team parlays in a row than standard bets. Use your head.
I realize I may be doing some people a disservice by posting this. I don't want to see anyone lose more money than they would have because of something that I said (typed). However, I feel it is important that people understand the math behind parlays.
My two cents.
Year after year, I keep hearing about the "dangers of parlays", and how bad of a bet they are. For a majority of bettors, that is true. However, it is not true for a select few. Here are the numbers that I came up with. I use a $1 bet for simplicity - obviously most (all?) of you would be risking significantly more.
Straight Bets
-110 Odds
Odds at 40% accuracy = 2 in 5 (40%)
5 bets breakdown: 2 wins (+1.818) 3 losses (-3)
Money breakdown: $5 bet, -$1.182 total
Profit Margin at 40% accuracy = -23.64%
Odds at 50% accuracy = 1 in 2 (50%)
2 bets breakdown: 1 win (+.909) 1 lose (-1)
Money breakdown: $2 bet, -$0.091 total
Profit Margin at 50% accuracy = -4.55%
Odds at 55% accuracy = 11 in 20 (55%)
20 bets breakdown: 11 wins (+10) 9 losses (-9)
Money breakdown: $20 bet, $1 total
Profit Margin at 55% accuracy = 5%
Odds at 60% accuracy = 3 in 5 (60%)
5 bets breakdown: 3 wins (2.727) 2 losses (-2)
Money breakdown: $5 bet, $0.727 total
Profit Margin at 60% accuracy = 14.54%
Parlays
3 team pays 6-1
Odds at 40% accuracy = 8 in 125 (6.4%)
125 bets breakdown: 8 wins (+48) 117 losses (-117)
Money breakdown: $125 bet, -$69 total
Profit Margin at 40% accuracy = -55.2%
Odds at 50% accuracy = 1 in 8 (12.5%)
8 bets breakdown: 1 win (+6), 7 losses (-7)
Money breakdown: $8 bet, -$1 total
Profit Margin at 50% accuracy = -12.5%
Odds at 55% accuracy = 1331 in 8000 (16.64%)
8000 bets breakdown: 1331 wins (+7986), 6669 losses (-6669)
Money breakdown: $8000 bet, +$1317 total
Profit Margin at 55% accuracy = 16.46%
Odds at 60% accuracy = 27 in 125 (21.6%)
125 bets breakdown: 27 wins (+162), 98 loses (-98)
Money breakdown: $125 bet, +$64 total
Profit Margin at 60% accuracy = 51.2%
Let's try to make that pretty:
Straight Bets Parlays
40% -23.64% -55.2%
50% -4.55% -12.5%
55% +5% +16.46%
60% +14.54% +51.2%
So, as you can see, if you are a losing bettor, you will lose more money by parlaying. However, if you are a winning bettor, you will win more money by betting 3 team parlays. Of course, all three picks have to be solid picks - you can't take two picks and randomly choose the third.
Granted, you could hit 60% of your picks and lose in the short term this way. You could also hit 40% of your picks and win. However, over the long run, doing three team parlays at 6-1 odds should improve your winnings if you are a winning bettor.
Standard disclaimer - if you lose all of your money on three team parlays, don't come crying to me. You either aren't winning a high enough percent of picks, or else aren't managing your money well. You have a much better chance of losing 15 3-team parlays in a row than standard bets. Use your head.
I realize I may be doing some people a disservice by posting this. I don't want to see anyone lose more money than they would have because of something that I said (typed). However, I feel it is important that people understand the math behind parlays.
My two cents.
