Parlays and correlation

A parlay ties several bets together: all of them have to win, and the payout multiplies. Two legs at -110 pay about +264. Four pay over +1200. That's the appeal. Here's the catch.

The margin multiplies too

Each leg carries the bookmaker's margin. In a parlay, the margins multiply with the odds. Two fair 50% legs should pay +300 (4.00). At -110 each, they pay 1.91 × 1.91 = 3.64, or +264. The more legs, the bigger the gap between the fair price and what you are paid.

Parlays are not a way to win more. On average they are a way to pay more margin, for a bigger, rarer payout.

When a parlay makes sense: correlation

Bookmakers usually price a parlay as if its legs were independent: multiply the chances. But some legs are not independent:

• A point guard's assists and the points of the big he feeds.
• A high-scoring game lifts both teams' scorers.
• A blowout cuts every starter's minutes on both sides.

When two legs tend to win together, the real chance that both hit is higher than the product of their chances. If the price doesn't account for it, the parlay is worth more than it pays you to think.

Correlation also works against you: an over on a player and an under on his teammate who shares the same shots fight each other.

On NBA House

The parlay builder shows each leg's own hit rate, how often the legs hit together in the games the players shared, and a correlation note for every pair. The "tonight's correlated pairs" list shows the pairs that have moved together most.

Keep parlays small, a few units at most, and don't let a big payout change your staking.