Guide
Guide · 5 min read
Why parlays cost more than they look
A parlay ties several bets together. Every leg has to win, and the payout is big because it is hard. The pitch is simple: turn a small stake into a large payout. The part that is easy to miss is that the sportsbook's cut is charged on every leg, and it stacks.
How a parlay pays
The payout multiplies the odds of each leg. At -110 a single leg returns 1.909 times your stake. Two legs return 1.909 × 1.909 = 3.64 times (+264). Three legs return 6.96 times (+596).
How the chance works
If the legs are independent, meaning one result does not change the chance of another, you multiply the chances. For three coin-flip games at 50% each, the chance that all three win is 0.5 × 0.5 × 0.5 = 12.5%.
The cut stacks
1 leg at -110: fair chance 50%, pays 1.909 times. Average cost: 4.5 cents per dollar.
2 legs: fair chance 25%, pays 3.64 times. Average cost: 8.9 cents per dollar.
3 legs: fair chance 12.5%, pays 6.96 times. Average cost: 13.0 cents per dollar.
The break-even for three legs is 1 ÷ 6.96 = 14.4%, but the real chance is 12.5%.
Each extra leg has the same small cut as a single bet, but you pay it again on a bigger and bigger share of your stake. That is why the cost is easy to miss: you see the payout, and you do not see the cut.
When the legs are not independent
Multiplying only works if one leg tells you nothing about another. Legs from the same game often do. If a team wins big, its quarterback probably threw for a lot of yards. The two are linked.
A made-up example
Leg 1: Team A wins, 50%.
Leg 2: Team A's quarterback throws over his yards line, 50% on its own.
If the legs were independent, both would win 25% of the time.
But suppose that when the team wins, the quarterback goes over 70% of the time. Then both win 35% of the time.
So the honest chance is not always the product of the parts. A sportsbook may adjust the payout for the link, so the price may or may not reflect it, and we cannot see how much.
That is why KYT does not multiply legs for you unless you tell it the legs are independent. Without that, we show the chance as unknown instead of pretending.
Reading a parlay price
You can check any parlay in three steps. First, multiply the odds of each leg to get the payout. Second, divide 1 by that number to get the break-even chance. Third, compare it with the product of the fair chances of the legs, if they are independent. The first number is what the parlay needs. The second is what it is worth.
The gap between them is the cut. For two legs at -110 it is 27.4% needed against 25.0% real, a gap of 2.4 points. For three legs it is 14.4% against 12.5%, a gap of 1.9 points. The gaps look small because the chances are small. Measured per dollar, as above, the cost keeps growing.
Some sportsbooks also pay less than the straight multiplication, or charge more on certain legs. Always compare the payout you are shown with the one you get by multiplying yourself.
Parlays are not forbidden. They are a way to buy a bigger payout at a higher cost per dollar. Knowing that cost before you buy is the whole point.
For entertainment and education. Nothing here predicts results or recommends a bet.