Over the
past few weeks, I have swerved a little off course to discuss sports
other than football as baseball finished up and basketball tipped off.
Now, back to our regularly scheduled programming…football. I have
touched on all the different possibilities for straight wagers and now
over the next couple of weeks, I want to cover parlays and teasers.
This past weekend was a great one for teaser players with 14 of the 16
favorites covering for their purposes, but that topic will have to
wait for seven days as I think it is easier to start with parlays.
When I
first started taking bets, I quickly figured out that taking parlays
was very profitable and I actually changed my business model to only
booking parlays. The rules I offered were extremely favorable to the
House (me) in that all plays had to be 3-teams or more and payouts
were much lower than what you get with offshore books nowadays. I also
had a requirement that all plays must win so ties went to my pocket
(and trust me, a lot of the lines I put out each week were on 3,4,6,7
and 10!). There were some tense moments even with these favorable
rules. I remember staring down a couple of $5000 payouts as a teenager
after two guys had each won their first 9 picks for their 10-team
parlays. I got a big back door cover by the Packers to save my
bankroll, my business and perhaps myself, and I’ve been a Green Bay
fan ever since. Despite a few tense afternoons, parlays helped pay a
lot of my expenses through high school and university. The betting
world has changed dramatically thanks to the Internet and the
increased competition it has brought to the industry. Parlays can now
be as much of a tool for bettors as they are for the House.
Okay,
story time is over, now to the mathematics portion of the show. In a
previous column, I detailed the math involved in figuring out the
House’s expected win percentage for straight wagers. Now I want to
explain the math behind Fixed Odds parlay payouts. I can hear the
collective groan now, but it really isn’t that hard. Fixed odds
parlays involve football and basketball spreads and totals at standard
odds (-110). Rather than having to calculate the odds of every parlay
uniquely, Vegas books (and now offshore) ones have instead derived a
standard set of “Fixed Odds” payoffs for such parlays.
Lets
look at a simple 2-team parlay using a real example, the Monday Night
Football game from this past weekend. St Louis –10.5 over the Rams and
a game total of 43.5. Parlaying a side and the total gives us four
combinations:
a) St Louis –10.5 and Over 43.5
b) St Louis –10.5 and Under 43.5
c) Chicago +10.5 and Over 43.5
d) Chicago +10.5 and Under 43.5
The odds of any one of these plays being a winner are 1-in-4 so the
actual odds would be 3/1. In actual fact, most books pay 2.6/1 (you
see it commonly written as 13/5) assuming all bets are at stand
payoffs (-110). To clearly illustrate how this works for the house
lets assume four different players each bet exactly $100 on a
different one of the four possible parlays for this game. Chicago and
the Under were the right picks (score was 21-16 for the Rams) so
Parlay D is the winner. The House would collect $100 from Allan, Bob
and Charlie (who bet A, B, and C respectively) and would pay the $260
to David (who had the winning play on Parlay D). David would also get
his risk money back. In total the House had $400 in handle, collected
$300 and paid out $260 for a net gain of $40, which is a 10%
theoretical hold (300-260=40, 40/400=10%). For 3-team parlays, it is
essentially the same calculation except there are 8 possible outcomes
and the payoff is 6-1. With $100 bets on each outcome, books would
collect $700 from the losing plays and pay out $600 tow the winner for
a net profit of $100 on $800 in handle for a 12.5% theoretical hold.
Below is a chart using standard Las Vegas payouts showing the actual
odds, Las Vegas payout and the house vigorish.
|
# of
Teams
|
Actual Odds
|
Las
Vegas Payout
|
House Edge
|
| 2 |
3/1 |
2.6/1 |
10.00% |
| 3 |
7/1 |
6/1 |
12.50% |
| 4 |
15/1 |
10/1 |
31.25% |
| 5 |
31/1 |
20/1 |
34.38% |
| 6 |
63/1 |
40/1 |
35.94% |
| 7 |
127/1 |
75/1 |
40.63% |
| 8 |
255/1 |
150/1 |
41.02% |
| 9 |
511/1 |
300/1 |
41.21% |
| 10 |
1027/1 |
700/1 |
31.54% |
It
doesn’t take a rocket scientist to see that bigger than 3-team parlays
should do very well for books but in fact we don’t hold this much. It
is hard to split the action on one game. It is impossible to evenly
split the action in parlays. We often see the same picks over and over
in different parlays and so the higher juice is simply to cover the
risk of having to pay out the occasional very large bet. Any bookmaker
that has had a good weekend ruined by a big 1000/1 payout on a parlay
knows the feeling and would argue that the juice isn’t high enough!
Remember that these odds are just the Vegas standard and there is
almost an infinite range of different payout schemas above the
standard 2.6/1 and 6/1 for 2-3 team parlays.
Now
that the math is out of the way, lets talk a little about how they can
benefit the bettor. First off, there is are always certain games where
you hear people say things like “If they can keep the score low, they
have a chance at winning”, or “they need to score at least 30 points
to really have a shot”. Certain games have a slight correlation
between the spread and total and betting these situations in a parlay
can be a big advantage to bettors. This is especially true of very
large spreads. On a college football game where the spread is –40 and
the total is 51, it is very difficult for the favorite to cover and
have the total still be Under. Granted, 42-0 or 49-0 gets it done, but
if the dog even scores just a Field Goal the favorite must score 44
points to cover, but cannot score more than 48 points or the total
goes over, a very limited range to win such a parlay. You can
virtually remove this option from the 4 possible parlays and are now
left with a situation where the payoff is 2.6/1 for just 2/1 odds
against, a +30% advantage. In fact, if you play favorite/over or
dog/under in situations where the spread is 40% or more of the total,
you should come out ahead. These are known as correlated parlays and
most well run books won’t take them for obvious reasons (they want to
be in business the next week!) but it never hurts to ask. Even without
the big spreads, playing the dog and the under (or favorite and over)
is typically a decent play and would have been a winner this past
Monday night.
I
wanted to also cover how to calculate the payoffs for parlays with
moneylines, off standard lines or with other sports mixed in. These
are known as True Odds parlays and the payoff for each one is
calculated individually. Due to time and space concerns, I will cover
this topic next week and then get to Teasers the week after.
Before
signing off this week, here is Kent’s Line Move of the Week. Kent is
BoDog’s top bookmaker and is kind enough to share with us his insight
into a key game each weekend. Here are his thoughts from the past
weekend: “The move of the week this week had to be Penn State for
sure. I saw the line open in Vegas late Sunday with Penn State –19 (at
Indiana) and by the time we opened on Monday it was up to –21. That is
not an uncommonly large move early in the week and with such a high
spread we didn’t pay too much attention, as most bettors prefer to
avoid such large lines. However, it quickly became apparent that there
was no such sentiment with our clients this week and the line was bet
all the way to –26! The line was moving so fast that we moved in
1-point increments. Obviously, some large betting service was hyping
this game. With the score sitting 45-25 Penn State halfway through the
fourth quarter, we looked good but an interception return for a TD and
another late Penn State TD gave the players the win. We also saw
action on Oklahoma –39 (a win and cover over Baylor) and Boise State
–29 (a win but non-cover over Louisiana Tech) so players were
certainly not afraid to lay the big numbers this weekend.”
My
thanks to Kent and I will be back next week with part two on parlays.
I
always welcome comments, questions and suggestions via email at
rob@bodog.com
Rob Gillespie
Operations Manager
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