Why sportsbooks encourage same-game parlays in the U.S. betting market

It's easy to see why the parlay is so popular: a $20 bet on a three-game parlay of three correlated props can light up a potential $400 or greater payoff. However, the economics of SGPs make it clear why operators are so keen to promote them and why bettors can get it wrong.

The Surging Misconception

Many bettors consider SGPs a way to “tell the story of the game.” For instance, a bettor could take LeBron James Over 28.5 points (-110) and Golden State Warriors Over 14.5 made threes (+100) and Game Total Over 230.5 (-110) in a game between the Lakers and Warriors. 

The reasoning seems logical: If the game is a high-scoring affair, LeBron goes off for a big night, Golden State goes off for threes, and all three go off. ^[1] The false belief is that the correlated results increase the chances of the parlay winning. 

Market Mechanics: Sportsbooks' Love for SGPs

The reason sportsbook brands encourage same-game parlays is that they have a lot of house edge. The -110 odds imply a 52.4% chance of winning. If several bets are made, then that probability is multiplied downwards, and the chances of success are much less. Even if the results seem to be correlated, the operators will make sure that the payout you get is less than what you would expect. 

The vig is also compounded on each leg, which compounds the margin. For instance, a $50 parlay that consists of three -110 selections may have a 25-30% effective house edge, while a straight bet may have a house edge of 4-6%. Lastly, parlays increase the variance: while there can be big wins, bettors will be kept engaged, but the expectation is still negative. 

Why Bettors Believe in Same-Game Parlays

Parlay betting is all about psychology. Bets such as “+800” seem like a lotto ticket that pays a $90 profit on a $10 bet, which is much more exciting than placing a consistent bet at -110. Social media amplifies the recency bias and displays screenshots of small amounts, making them big, which creates a sense of achievability. There's overconfidence as well, with fans developing a narrative about teams and star players, believing they “know the script.” 

Breaking the Logic

A bettor could make a $100 same-game parlay in a Chiefs vs. Bills game, with the wagers being Kansas City at -120, Patrick Mahomes over 299.5 passing yards at -110, and Travis Kelce touchdown at +120. Each of these outcomes may appear to be related on an individual basis. But the compounded probability is much less than what one might think. 

Even if Mahomes throws for 320 yards, Kelce might not score. But even if Kelce scores, the Chiefs could still lose. The parlay is listed at +400 by the sportsbook, which means that they believe it has a 20% probability. The real fair probability may be as low as 25%, but the operator margin will ensure that the bettor is paying for correlation risk. ^[2]

Industry Setting

Same-game parlays have been a key component of the modern U.S. betting landscape, as they fit in with sportsbooks' design and profit-making model. Mobile platforms like DraftKings, FanDuel, and BetMGM prominently display parlay builders. ^[1] They also work well with live betting, which means fans can create story-based tickets during the game. 

From an economic standpoint, parlays are very profitable products. Storylines and eye-catching payouts are what public bettors are looking for, and sportsbooks are looking for compounded vig and consistent profitability.