How Parlay Odds and Payouts Are Calculated
Parlay odds are calculated by multiplying the decimal odds of each leg together. The formula is straightforward but the conversion from American odds requires an intermediate step.
Converting American Odds to Decimal
American odds (the default in U.S. sportsbooks) must be converted to decimal format for parlay calculation: Favorites (negative): Decimal = 1 + (100 ÷ absolute value). Example: -110 → 1 + (100/110) = 1.909. Underdogs (positive): Decimal = 1 + (odds/100). Example: +150 → 1 + (150/100) = 2.500.
Parlay Payout Calculation
Multiply all decimal odds together, then multiply by the stake. A 3-leg parlay with -110, +150, -120: Decimal odds: 1.909 × 2.500 × 1.833 = 8.753. $10 stake: $10 × 8.753 = $87.53 total payout ($77.53 profit).
Standard Parlay Payout Chart
| Legs | All at -110 | $10 Payout | Implied Probability |
|---|---|---|---|
| 2-leg | +264 | $36.40 | 27.47% |
| 3-leg | +596 | $69.55 | 14.37% |
| 4-leg | +1,228 | $132.83 | 7.52% |
| 5-leg | +2,435 | $253.55 | 3.93% |
| 6-leg | +4,741 | $484.12 | 2.06% |
| 8-leg | +17,915 | $1,801.49 | 0.56% |
| 10-leg | +67,313 | $6,741.29 | 0.15% |
Round Robin Parlays: Reducing Risk on Multi-Leg Bets
A round robin creates all possible parlay combinations from your selections at a chosen parlay size. Instead of one 4-leg parlay (where all four must win), a round robin creates multiple smaller parlays — allowing profit even if one leg loses.
How Round Robin Combinations Work
| Selections | Parlay Size | Number of Parlays | Cost at $10 Each |
|---|---|---|---|
| 3 picks | 2-leg | 3 parlays | $30 |
| 4 picks | 2-leg | 6 parlays | $60 |
| 4 picks | 3-leg | 4 parlays | $40 |
| 5 picks | 2-leg | 10 parlays | $100 |
| 5 picks | 3-leg | 10 parlays | $100 |
The combination formula is C(n,k) = n! ÷ (k! × (n−k)!) where n is total selections and k is parlay size. A round robin of 4 picks in 2-leg parlays (C(4,2) = 6) means if 3 of 4 win, you profit on 3 of 6 parlays while losing 3. This risk distribution is why sharp bettors prefer round robins over large parlays, according to betting strategy analysts at The Action Network.
Round Robin vs Straight Parlay Example
4 picks at -110 each, $10 per parlay: Straight 4-leg parlay: 1 bet × $10 = $10 risked; payout = $132.83; all 4 must win. Round robin (2-leg): 6 bets × $10 = $60 risked; if 3 of 4 win, 3 parlays pay $36.40 each = $109.20. Net: $109.20 − $60 = $49.20 profit despite losing one leg. The round robin costs 6× more but survives a losing leg.
Implied Probability and the Sportsbook Edge
Every set of odds carries an 'implied probability' — the likelihood the sportsbook assigns to that outcome. Understanding this reveals the sportsbook's built-in profit margin (vigorish or 'vig').
Calculating Implied Probability
Favorites: Implied Probability = |odds| ÷ (|odds| + 100). Example: -150 → 150/250 = 60.0%. Underdogs: Implied Probability = 100 ÷ (odds + 100). Example: +130 → 100/230 = 43.5%. Total implied probability for -150/+130 matchup: 60.0% + 43.5% = 103.5% — the 3.5% over 100% is the vig.
How Vig Compounds in Parlays
The vig on each leg multiplies in a parlay, dramatically increasing the sportsbook's edge. A Harvard Sports Analysis Collective study showed: Single bet vig (standard -110/-110): 4.55%. 2-leg parlay vig: ~8.8%. 3-leg parlay vig: ~12.8%. 5-leg parlay vig: ~20.5%. 10-leg parlay vig: ~36.2%.
This compounding vig explains why sportsbooks heavily promote parlays — according to the AGA, parlay revenue accounts for roughly 30% of total sportsbook win despite representing a lower share of total handle (money wagered). Professional sports bettor Rufus Peabody has publicly stated that 'parlays are the worst bet in sports betting from an expected value perspective.'
What Happens When a Parlay Leg Pushes (Ties)
Push Rules by Sportsbook
When one leg of a parlay results in a push (neither win nor loss), most sportsbooks 'remove' that leg and reduce the parlay by one leg. A 4-leg parlay with one push becomes a 3-leg parlay at the remaining odds. This is the standard rule at DraftKings, FanDuel, BetMGM, and most major U.S. sportsbooks.
Push Impact on Payouts
| Original Parlay | Push Result | $10 Payout (All -110) |
|---|---|---|
| 2-leg, 1 push | Becomes single bet | $19.09 |
| 3-leg, 1 push | Becomes 2-leg parlay | $36.40 |
| 4-leg, 1 push | Becomes 3-leg parlay | $69.55 |
| 4-leg, 2 pushes | Becomes 2-leg parlay | $36.40 |
Same Game Parlays and Correlation
Same Game Parlays (SGPs), introduced by FanDuel in 2019 and now offered by all major sportsbooks, allow combining correlated outcomes from a single game. The sportsbook adjusts odds for correlation — for example, combining 'team to win' with 'team total over' (positively correlated events). ESPN's David Purdum reported that SGPs carry significantly higher vig than traditional parlays (15–30% vs 5–10% per leg), making them the most profitable product for sportsbooks.
Parlay Betting Strategy: When Parlays Make Sense
When Parlays Have Positive Expected Value
Most casual parlays are negative EV (expected value), but specific situations can justify them: Correlated parlays where outcomes are linked (e.g., a blowout increases both winning margin and total points), line shopping across multiple books to find the best odds for each leg, and promotional offers like DraftKings' or FanDuel's parlay insurance (refunding the stake if one leg loses on a 4+ leg parlay). The Analytics of Odds (2023 research paper, MIT Sloan Sports Analytics Conference) found that line-shopped 2-leg parlays can occasionally achieve +EV when combining edges across books.
Bankroll Management for Parlays
Professional sports bettors recommend allocating no more than 5–10% of total betting bankroll to parlays. The Kelly Criterion, a mathematically optimal sizing formula used by professional bettors and investors, typically suggests much smaller parlay bets than individual wagers due to the lower win probability. A practical approach: cap parlays at $5–$20 per bet with a maximum of 3 legs, treating them as entertainment rather than the core of your strategy.
The 2-Leg Parlay Sweet Spot
Data from Covers.com and The Action Network shows that 2-leg parlays offer the best risk-reward ratio: reasonable win probability (~27% at -110), meaningful payout boost (2.64× vs 1.91× for singles), and minimal vig compounding (~8.8% vs 4.55% for singles). Beyond 3 legs, win probability drops below 15% and vig compounds rapidly, making long parlays essentially lottery tickets.
Step-by-Step Instructions
- 1Enter the odds for your first pick in American (-110, +150), decimal (1.91, 2.50), or fractional (10/11, 3/2) format.
- 2Add additional legs (2–15 total) with their respective odds.
- 3Enter your stake (wager amount).
- 4View the combined parlay odds, total payout, profit, and implied win probability.
- 5Toggle on 'Round Robin' mode to see all possible sub-parlays at your chosen size.
- 6Mark any leg as 'Push' to see adjusted payout with that leg removed.