Parlay betting is one of the most profitable products that sportsbooks can offer their customers. When bettors place a straight bet, the theoretical house hold is 4.5%. On accumulators, this profit margin is effectively multiplied by the number of bets or legs included in the accumulator. So, in a two-team parlay, the bookmaker could expect to win 9% of all money wagered. Given the math, it’s easy to see why it would be better for sportsbooks to entice customers to place these types of bets.
Although parlays are generally moneymakers for sportsbooks, there is one big exception to the rule: correlated parlays. A parlay is considered correlated when the outcome of one of the parlay bets would have a significant influence on the outcome of another parlay bet.
To illustrate this point, I will use an obvious example from the NFL with AFC straight bets and Super Bowl straight bets. If you’re betting on the New England Patriots to win the Super Bowl, they obviously need to have won the AFC championship to make it to the Super Bowl, so outright AFC is 100% correlated to outright Super Bowl. Combining these bets is such an obvious winning strategy that no bookmaker will let you place them.
Now let’s take a look at some less correlated accumulator bets that sportsbooks and local bookmakers will allow you to make. Consider an NCAA football game in which USC is a 35.5-point favorite to beat Fresno State, and the game’s over-under is 47. For USC to cover the 35.5-point spread, it would have to score at least 36 points. If they are successful in doing so, then you should seriously consider betting the game goes over 47 points as well, as USC coverage would give you an early 36-point lead towards the end of the game. In fact, if Fresno manages to get just one touchdown, it will automatically win the top bet if USC covers the spread.
The example above is a popular type of parlay correlated between betting on the favorite and betting on the total. There is an equally strong correlation between betting on the underdog and betting on the total. Negative correlations have been shown to exist if you try to combine the favorite and the underdog, or the underdog and the top in a parlay. I highly recommend staying away from these “anti-correlated parlays” unless your strategy is to lose money as fast as possible!
The higher the proportion of the total to spread the stronger correlation. The rule of thumb is that if you divide the spread by the total and get a number greater than 0.35, you could bet blind on these correlated parlays and make money in the long run.
