Definition
Parlay combines multiple bets; all legs must win for payout. Winnings from each leg roll into the next. True odds multiply probabilities: two 50% legs = 25% combined win probability. Books pay parlays at worse than true odds, giving them larger margin than single bets. A 2-team −110/−110 parlay should pay +260 at true odds; most books pay +260 so it's roughly fair at standard juice. Three or more legs increasingly favor the house.
Worked Example
Three legs each at −110 (implied 52.38% each). True combined probability: 0.5238 × 0.5238 × 0.5238 = 14.4%. True payout should be 1 ÷ 0.144 − 1 = +595. Books typically pay +595–600 for 3-team parlays, roughly matching true odds at −110. Adding +EV legs compounds edge; adding −EV legs compounds negative expectation.
Why It Matters
Parlaying +EV bets amplifies edge. Parlaying −EV bets at better-than-fair parlay boosts are common sharp plays — but only if individual legs are already positive EV.