Are Same-Game Parlays the Fast Food of American Sports Betting?

How Same-Game Parlays Work

The traditional parlays calculate the probability of all the outcomes. The outcomes of SGPs are often correlated, and thus SGPs differ. The bets are not independent; for example, if Patrick Mahomes throws for more than 275 yards, the chances of the Kansas City Chiefs winning go up. Sportsbooks know this correlation, and they make the corresponding reductions in their payouts, which is known as the “correlation tax.” 

An SGP could be priced at +350 when the three legs of a parlay are independent and would be priced at +596 in a parlay. This adjustment can make a big impact on the sportsbook's hold, which can be up to 20 percent or more, versus the 5 percent hold on straight bets ^[1]. Those familiar with NFL betting markets understand how these mechanics work.

Reasons Punters Embrace SGPs

In spite of hidden taxes, bettors are still very keen on playing SGPs. One of the reasons for this is the psychology of payouts. The $20 bet on a +500 SGP can be quite thrilling, as it can be worth $100, whereas a wager on a single -110 can bring in less than $20. There's also an element of entertainment. 

Like fantasy sports fans, bettors love to create a narrative around their favorite players, and SGPs enable them to bet according to that narrative. This culture is reinforced by social media as screenshots of “lottery-style” wins are shared extensively, creating a fun experience with the SGPs. 

Convenience is the other consideration. Mobile apps feature sleek bet-building interfaces, making them as easy to place as ordering fast food through a drive-thru window. This can be seen particularly in the NBA betting markets, where player props are the most popular form of parlay betting ^[2].

Breaking the Logic

SGPs can often be so exciting that the combined risk is overlooked. The more legs that are added, the less likely it is to succeed, and if the legs are correlated, the calculations are even harsher. Even if each leg of a three-leg parlay appears to be a strong possibility, the odds of the parlay winning could be less than 10 percent. This is because operators reap the benefits more, as public filings indicate that sportsbooks generate a large portion of revenue from SGPs ^[1]. 

Variance is often confused with value by bettors, who will often think that a bet with a high payout is a value bet. In fact, most of the SGPs lose because of a variance. Though the payout may seem promising, the combined odds of achieving that payout are much less than the odds that are advertised ^[2].

Industry Context

Since sportsbooks can make more money off of SGPs than on regular wagers, they have been going all in on the marketing of SGPs. Research indicates that the sportsbooks’ holdings in SGPs are three to five times higher than those on straight bets ^[1].

SGPs are more than just a product to sportsbooks; they are a strategy, a means to profit from the frenzy of sports and a way to encourage bettors to keep wagering. Even in sports that are not as player-prop-centric as other markets like the MLS betting, operators are trying to replicate the SGP-style products in order to try to get the same engagement ^[3].