Why I stopped doing parlays
Parlays are fun most people would say. “It is not about money, I am just getting a little action”. A parlay can be compared to a lottery ticket. If the amount of fun outweighs the small wager then by all means. Parlay away!
I can not measure what “your” fun is worth to you but I can compute the expected value of a $10 6 pick parlay.
Even if you have an edge on a game, for the purposes of this article let’s just say each leg in the parlay has a 50% chance of winning. (same as the coin flip in the previous article). You have a 50% chance of getting each pick right, then the chance of getting the first two picks right is half of a half, or a quarter. Your chance of getting the first three picks right is half of a quarter, or an eighth and so on. The six pick parlay would look like this.
(1/2)x(1/2)x(1/2)x(1/2)x(1/2)x(1/2)=(1/64) or a 1.5625% of cashing that ticket. Not impossible but pretty improbable. The Vegas odds of a six pick parlay is 45/1. That means if all the picks hit, your $10 wins $450.
But this is where it gets tricky. If one of the picks pushes, it essentially downgrades to a five pick parlay. 22/1 or $10 gets you 220. That is a big drop. If two teams push you are left with a 4 pick parlay 11/1 or $10 gets you $110. There are various variables that can change the percentage slightly like pushes, buying points and big favorites greatly affect your payout.
So let’s just try this to keep it simple.
(Amount won per bet x probability of winning) – (Amount lost per bet x probability of losing)
($450×1.5625%)-(10×98.4375)= -$2.8125. Yikes! Basically the expected value of that $10 6 pick parlay is roughly worth -$2.8125. Is that even possible? No wonder the sports books are rich.
In Sports betting, stocks, and investments does not matter $10 for -$2.8125 is an easy no.
But wait! What is your value of fun? This is a variable that I can not determine thus I can not decide if that is a deal you would say yes to. Everyone spends their own money the way they want. Parlay away!