The Parlay Bet is Revolutionizing Gambling
The Parlay Bet is Revolutionizing Gambling
By: Peter Frerichs
March 28, 2025
Insight Highlights
- The ultimate success of the parlay bet – easy and fun.
- The house advantage
- The role of machine learning and artificial intelligence
- Industry leaders and space for collaboration
- Regulators are watching
By the time you read this, the Super Bowl will have come and gone. The biggest US sporting event of the year, here is an example of just one of the more interesting wagers one could have played:
- “Search for a King” (+950 on DraftKings)
- Saquon Barkley - anytime touchdown
- Xavier Worthly - anytime touchdown
- A.J. Brown - anytime touchdown
Also known as a sports betting parlay wager, casual and not-so-casual bettors are increasingly drawn to combining multiple bets into one, thus increasing the potential payout. For example, a straight bet that Philadelphia Eagles running back Saquon Barkley would score a touchdown any time during the Super Bowl was -200. This means that a bet of $200 is needed to win $100. It’s a popular bet, but not overly interesting.
The above “Search for a King” bet, however, combines three different outcomes. The bettor is glued to the game, hoping that all three of those players score a touchdown. With odds at +950, that translates to a payout of $525 on a $50 bet, or over $100 on a small bet of just $10.
Key to Anything? Make it Fun!
In the early years, Las Vegas was a destination for serious gamblers. Over time, the larger industry evolved with attractions that appealed to families and children. There is still a lot of gambling occurring in Las Vegas, but the city is now fun for everyone. Broad appeal and “fun” lie at the heart of Vegas’ tremendous growth.
Sports betting parlays work in the same way. These bets are easy, attractive to seasoned or those with little gambling experience, exciting to track, and most of all, fun. While parlay bets are offered at nearly every physical casino, online gambling now supercharges the fun factor with parlay bets available on every smartphone.
One of the largest online gambling platforms, FanDuel, regularly posts the lucky winners of sports betting parlays on its X account.
Source: FanDuel Sportsbook X Account
The winner above tracked player and team performance across three games. They bet just $10 to win $1,185.60. Arguably one of FanDuel’s most famous winning sports betting parlays X posts was a bettor who wagered just $1.10 on 23 college basketball games. All 23 picks were winners, netting the lucky gentleman $532,000.1
Who’s Winning with Sports Betting Parlays?
While betting $1.10 to win $532,000 is splashy, it’s also extremely rare. Bettors who aren’t losing their kids’ college funds yet are having a blast making small bets to win the “fun factor.” But, the clear financial winner with sports betting parlays is the house - and it’s not even close.
Brick-and-mortar casinos have long made money on the gambler’s desire to get rich quick. But the odds are the odds, and casinos cannot somehow make the craps table three or four times more profitable for themselves. Sports betting parlays, however, have changed everything. When multiple bets are stacked upon each other, reaching into the teens or even twenties, the odds tilt increasingly to the house. Betting on 10 things to happen and losing more often than winning is driving revenue to physical and online casinos at record rates.
Source: Trendline. June 8, 2024. “US Sports Betting: Revenue skyrockets to $11 Billion.”
The Role of Machine Learning and Artificial Intelligence (AI)
The rise of sports betting parlays owes a lot to machine learning and AI. Online and physical casinos still employ individuals to monitor games, report on injuries, and gather as much information as possible before setting their odds. But with machine learning and AI, thousands of potential outcomes can be instantaneously crunched and analyzed.
The two companies that do sports betting parlays the best are the current market leaders - FanDuel and DraftKings.
Flutter Entertainment, the parent company of FanDuel, introduced the sports betting parlay concept in the US in 2016.2 Originally based on “multis,” a popular parlay model in Australia, engineers got to work on what would be extremely difficult algorithms for US-based sports.
In football, for example, how a quarterback is throwing the ball directly affects the number of potentially good receptions a wide receiver can expect. The knock-on effects of player performances become extremely complicated, but machine learning and AI models can now analyze historical patterns and spit out reasonably reliable odds that are then coupled with on-the-ground research.
It’s difficult to ascertain why FanDuel’s sports betting parlay win margin outperforms its rivals - 24% vs. 17% for DraftKings and 11% for BetMGM.3 The models are understandably fiercely protected, but Flutter, Fan Duel’s parent company, has years of pricing bets overseas as well as intimate knowledge of the US fantasy sports market. DraftKings and BetMGM don’t count on the same.
Who Else is Moving Sports Betting Parlays?
While fun bets via a swipe are great, growing parlay betting relies on much more.
Source: American Gaming Association. February, 2025. “State of Play.”
After the Supreme Court opened the door in 2018, a flood of sports betting washed over the country. Growth was swift, but overall legalization has slowed as of late. Thanks to sports betting parlays, however, FanDuel revised its 2030 earnings estimate to $63 billion, considerably higher than just $40 billion two years ago.4
One of the factors, aside from the fun factor, fueling the parlay wave is celebrity endorsements.
Source: Kevin Hart X Account
Big names such as comedian Kevin Hart and former NBA star Charles Barkley are now partners with the aforementioned companies, pushing out their sports betting parlay picks over social media to millions of followers. Approximately 20% of DraftKings' national TV advertising spending last year was on parlays alone. That was double the 11% they spent in 2022.5
Another interesting segment that has caught the eye of social-media marketing agencies is the “micro-influencer.” These are folks with followers over X of 20,000 or Instagram with 100,000 plus who post their parlay picks. SGG Media, an agency out of California, manages over 2,200 influencers in the sports sphere, and compared to traditional media advertising, DraftKings and others are reaching bigger audiences for far less money.6
Larger players in the sports world, such as ESPN, launched a partnership with Penn Entertainment called ESPNBet. Caesars Entertainment entered the online parlay arena in 2021, but they quickly lost share.7 Fortunately for FanDuel and DraftKings, but unfortunately for those on the outside looking in, the barrier to entry is steep. Technology rules the online parlay world, so in the case of ESPN, unless Penn Entertainment has a product that can compete with the likes of FanDuel or DraftKings, ESPN’s involvement isn’t likely to move the needle.
Sports Betting Parlays Remain a Vice
Gambling, like alcohol or tobacco, is considered a legal “vice.” Yet, sports betting parlays are increasingly attractive to a younger cohort, and this has caught the eye of watchdog groups, lobbyists, and regulators. New Jersey is a revenue leader, and calls to their gambling addiction hotlines have doubled in the four years since legalization.
Source: Krauss, Ben. January 3, 2024. “The sports gambling industry needs reform.” Slow Boring.
Industry proponents argue “more calls” are simply a result of greater awareness. They also cite studies that show a vast majority of people diagnosed with gambling addiction also have co-occurring alcohol-use disorder.8 But as with any vice, over-consumption can be problematic. Research in Ohio showed the state registered (pre-legalization) 0.4% of residents as problem gamblers and 5.3% were at risk of becoming so. A decade later, post-legalization, those numbers spiked to 2.8% as problem gamblers and a troubling 17% at risk.9
As sports betting parlays continue to grow, it is a safe bet regulators will not lag far behind.
Concluding Thoughts
Sports parlay betting provides a stable revenue source to what can be a volatile industry. Just last October, FanDuel had its worst day of the NFL season when 11 of the 13 favorites won. Majority outcomes like this can equate to tens of millions of dollars being paid out.10
These are large “unknowns,” so leaning into sports betting parlays and ensuring they remain easy and exciting provides win rates and potentially reliable revenue.
The future of parlay betting lies in volume and the freedom to grow. If casinos can increase the number of bettors who, in turn, can afford to lose small sums of money, all the better for the house. The risk lies in the greater public’s boredom with parlay bets or a regulatory crackdown. Both, for now, seem to be long shots.
Sources:
- Salzman, Avi. August 11, 2023. “DraftKings and Other Sports Gambling Apps Are Hitting the Jackpot With ‘Parlay’ Bets. As They Win, You Lose. Barron’s.
- Sayre, Katherine and Simonetti, Isabella. January 25, 2025. “America Has Fallen in Love With Long-Shot Sports Bets.” The Wall Street Journal
- Salzman, Avi. August 11, 2023. “DraftKings and Other Sports Gambling Apps Are Hitting the Jackpot With ‘Parlay’ Bets. As They Win, You Lose. Barron’s
- Sayre, Katherine and Simonetti, Isabella. January 25, 2025. “America Has Fallen in Love With Long-Shot Sports Bets.” The Wall Street Journal
- Ibid.
- Ibid.
- Salzman, Avi. August 11, 2023. “DraftKings and Other Sports Gambling Apps Are Hitting the Jackpot With ‘Parlay’ Bets. As They Win, You Lose. Barron’s
- Barnes, Grace M, Welte, John W, O Tidwell, Marie-Cecile, and Hoffman, Joseph H. January 20, 2015. “Gambling and substance use: co-occurrence among adults in a recent general population study in the United States.” International Gambling Studies.
- Jones, Callum. December 1, 2023. “We’re killing the youth of America: calls grow for crackdown on US gambling.” The Guardian.
- Sayre, Katherine. November 13, 2024. “This Year’s Big NFL Winners: Fans, Not Sportsbooks.” The Wall Street Journal.
