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Sports Betting 101: Should you Bet Parlays and Teasers (Spoiler: No)

April 5, 2020 11:56 PM

Read the first four parts of Bankroll Management and the rest of the Sports Betting 101 series.

Over the past few days we've discussed the importance of flat betting, betting to risk instead of betting to win and limiting our numbers of bets each day. Now it's time to discuss one of the most critical aspects of bankroll management: Avoiding parlays.

The parlay is one of the most popular bet types for new or casual sports bettors. This is when a bettor makes multiple wagers (at least two) and ties them together into the same bet. Parlays can involve multiple bets in the same sport or across multiple sports. If any of the bets in the parlay lose, the entire parlays loses. However, if all of the bets in the parlay win, the bettor enjoys a massive one-time payout.

To put this in perspective, let's say a bettor wants to risk $100 each on 3 MLB moneyline bets. All three teams are underdogs: the Pittsburgh Pirates + 150, the Texas Rangers + 100 and the Cincinnati Reds + 200. If you bet $100 on all three teams individually and all three won, you would win $450 total, plus get the $100 back that you risked on each team.

But if you bet $100 on all three teams in a 3-team parlay and all three teams won, you would win a whopping $1,500, plus get the $100 you risked back.

Sounds pretty awesome, right? 

This is precisely why Average Joes and recreational bettors love parlays. Everyone wants to get rich quick and the parlay affords bettors this opportunity. For many, the possibility of turning a big profit in one fell swoop is too appealing to resist. 

Oftentimes you'll read articles about huge parlays that hit and see sportsbooks post screenshots on social media promoting big parlays winners. 

"Check out this bettor who cashed a 14-team parlay across the NHL, NBA and College basketball on Sunday. He turned $200 into $58,000!"

"Tons of big winners on Saturday, but this bettor takes the cake. He turned $60 into $80,000 with a 20-team college football parlay."

"Wow! This college basketball bettor cashed a 12-team parlay yesterday! The genius turned $5 into $12,000!"

For casual bettors, hitting this type of epic parlay is the ultimate dream. But the truth is, it's more like an unreachable fantasy. Ask yourself this: If sportsbooks are getting crushed by these big parlays and having to pay out huge sums of money, why would they be so willing and open to sharing this information? If parlays hurt their bottom line, why are they promoting them?

Because parlays provide the house with a massive edge.

To understand just how great the house edge is with parlays, we must first define the term "hold." The hold is the percentage of money the bookmaker holds onto after all bets have been settled and paid out. Think of it as a win percentage for the books. 

According to a UNLV Center for Gaming Research study, from 1992 to 2019 Nevada sportsbooks boasted a hold of roughly 30% on parlays. In comparison, every other major sport averaged a hold of roughly 5%. In other words, the house wins 30 cents on every dollar wagered on parlays. They only win 5 cents on every dollar wagered on individual sport bets. 

Translation: the sportsbooks make an absolute killing off of parlays. They are the No. 1 cash cow for the house, which is why sportsbooks are so happy to promote them.

Simply put, parlays are the sports betting equivalent of the penny slot at the casino. They are incredibly appealing but also highly dangerous. Bettors get mesmerized by the potential of a big payout and fall into the psychological trap of going back to the parlay well again and again. However, whether it's the penny slot or the parlay, the big winners are almost always the books, not the bettors.

Any seasoned wiseguy knows that sports betting isn't easy. It's hard enough to win one bet. So when you layer on more and more bets onto the same wager, you're playing right into the sportsbooks' hands by increasing your risk and decreasing your chances of winning. Sure, you might cash a juicy parlay once in a blue moon, but it likely took you dozens and dozens of lost parlays until you finally hit one. In the end, the juice just isn't worth the squeeze. 

It's also important to note that if you have a four-team parlay and you win three of the four bets, you lose the entire parlay even though you hit 75% of your bets. However, if you embraced flat betting and bet those four teams individually, you would have profited roughly two units, more or less, depending on the odds. By betting the four teams in a parlay, you lost money. But by betting the 4-teams individually, you would have made money.

Another popular bet among new and casual bettors is the teaser. Teasers are similar to parlays. The big difference with teasers is that bettors can adjust the point spread or the total in their favor, moving the line up or down a certain number of points. This is popularly referred to as "Teasing up" or "teasing down." 

Just like parlays, all bets involved in the teaser must win in order for the teaser to win. If one bet in the teaser loses, the entire teaser loses. Because teasers are an adjustment to the point spread and total, they are only available for football and basketball.

Teasers are incredibly popular for NFL Sundays. The most common NFL teasers are 6 points, 6.5 points and 7 points. Sportsbooks have their own payouts and rules for teasers, with most books capping teasers at around 10 bets combined, give or take. The more teams you include in the teaser, the higher the payout. But of course, all must hit for you to win.

For example, let's say the Buffalo Bills are 2.5-point underdogs against the Miami Dolphins with the total of 45.5. Maybe you are leaning the Bills and the over, but you aren't totally confident in either. You could bet a 6-point teaser on both the spread and total, teasing the Bills up from + 2.5 to + 8.5 and teasing the total down from 45.5 to 39.5. Essentially, the goal of the teaser is to get better numbers. 

The price of a 6-point, two-team football teaser is typically -110, which means you would have to risk $110 in order to win $100. If you increase a 6-point teaser from two teams to six teams, the price improves to + 610, meaning a $100 dollar bet would win you $610 if all six hit.

A 10-team, 6-point teaser would pay out roughly + 2500, meaning a $100 bet would win you $2,500. As you can see, the price and payout gets better as you add more teams, bets or "legs" to the teaser. However, the reward doesn't come without risk. By layering on more and more bets, you increase the likelihood that at least one of them loses, which means you lose the entire teaser. 

Teasers are popularly referred to as "sucker bets." They got their name because, you guessed it, they're a tease. On the surface, the teaser sounds like a layup and can't-miss bet. After all, you are getting much better numbers that look like they can't possibly lose. But almost always, one of the bets ends up losing.

There's nothing wrong with placing a parlay or teaser bet every once in a while for fun. But bettors should never make parlays and teasers a daily habit or common routine. You are assuming massive risk and playing right into the sportsbooks hands. Instead, stick to flat betting. It is a much smarter long-term strategy. 

In the case of both parlays and teasers, never forget: if it looks too good to be true, it almost always is. 

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