Multiway Markets And Parlays

All the markets I’ve discussed so far have been simple two-way markets. Bet on this team or that team. Bet over or under. Sportsbooks also offer multiway markets.
Be careful with multiway markets.

In theory nothing is special about a multiway market. There’s nothing fundamentally different about betting on one of three outcomes or one of five outcomes or one of 100 outcomes versus one of two outcomes.

In practice, sportsbooks use multiway markets to hide very high hold percentages.

My last article notwithstanding, it’s not too hard to look at a two-way market and eyeball the hold. If it’s -125/+105, it’s a “standard” hold (in the 4-something percent range). If you see -120/-105 then it’s a little higher (5-something percent). If it’s -120/-110 it’s higher still (6-something percent).

In two seconds, try to estimate the hold on this five-way market:

+140 / +245 / +375 / +725 / +1325

Buzz. Time’s up.

It’s about a 10 percent hold. Close to the same as a -125/-125 market.

The process for calculating the overround and hold are the same as for a two-way market. You convert every option to a break-even percentage, add up all the percentages, take the reciprocal, and that’s the average return to player percentage.

Once you get used to it, estimating the hold for any two-way market gets to be second nature. I don’t know anyone who can just look at a multiway market like the one above and make a quick and accurate estimate of the hold.

This fact makes it more difficult to bet intelligently into multiway markets, since the size of the hold in a market is one of the most important factors in whether you will find good bets in the market.

Some markets are multiway by nature. Futures markets like “pick the league champion” or “who will win the home run crown” bets obviously lend themselves to multiway markets.

But it’s become an unfortunate trend in bookmaking these days to take natural two-way markets and convert them to multiway markets in an effort to obfuscate the (high) hold percentage.

One of the most popular ways to bet golf is to bet a matchup between two paired golfers. Who will score better in the tournament, Jordan Spieth or Justin Rose? Maybe you can bet Spieth at -130 or Rose at +110. And if they score exactly the same, the bet pushes.

The book would hold about 4 percent in this market if there were no pushes. Because pushes return the full bet to bettors on either side, the chance of a push drops the hold percentage below 4.

Some books don’t like low hold percentages and don’t like pushes. So, they’ve “solved” this “problem” by converting the natural two-way market (Spieth or Rose, who do you like?) to a three-way market.

You can now bet Spieth, Rose, or…. tie?

This is not a natural market. Who wants to bet on a tie between two golfers?

“Yeah, man, Spieth’s putting has been next level. But Rose has put a couple good tournaments together. I think I want to bet that they will have exactly the same score after four rounds.”

Let’s be real. The main purpose for presenting the matchup this way is to convert the pushes into wins for the book on both golfers.

And superficially, they can make it look like the hold is minimal. They could price the market Spieth -125, Rose +115, Tie +1,800 for example. If you ignore the tie and just look at the two golfers, it looks like you’re getting a deal on the vig.

If the tie pushed like a normal market, -125/ +115 would be a pretty good deal with about a 2 percent hold. But add in the separate tie bet and the hold balloons to about 7 percent, similar to what it would be if they offered the normal two-way market but priced the golfers -140/ +100.

I think this party trick doesn’t belong in American sportsbooks.

I guess operators should be allowed to post whatever markets they like. But I think they should be required by law to display the overround, the return to player percentage, or the calculated hold percentage prominently next to every market they offer.

It’s kind of like the calorie counts posted on fast food restaurant menus these days. Maybe you look at the ultra-mega-sized combo meal and instead of ordering it you see the 1,900 calories in parenthesis and think twice or order something else.

Or maybe you order it anyway and stuff your face. We’re adults, this is America, you do what you want. But I’m glad fast food restaurants these days aren’t trying to pretend their calorie bombs are health food. And sportsbooks shouldn’t pretend they’re offering a good deal to their customers by hiding the hold in artificially constructed multiway markets.

Put that hold out there in bold and let sportsbooks compete for their customers the honest way.

The hold percentage on markets with a dozen or more possible choices is often 20 percent or more. These are markets like championship futures, golf or tennis outrights, player award markets, and game props like who will score the first touchdown.

The ultra-high hold doesn’t mean there are never good bets in these markets, but it does mean that most of the offered bets in the market are really, really bad.

Parlays

There’s a lot to say about parlays. I’ll get the ball rolling here and continue in future articles.

It’s important to be clear on what a parlay is. A parlay is just a bet where your winnings on one bet get rolled over into a bet on something else. Say you bet $100 at even money on a morning MLB game and then you plan, if you win that bet, to bet it all (i.e., $200) on an evening MLB game at -200.

If you win the second bet, you have $300 at the end. You have the $100 you started with, the $100 you won on the first game, and the $100 you won (at -200 odds) on the second game.

A parlay bet is a convenient way of wrapping up this plan to roll over winnings onto the next game. So instead of making two bets (one conditional on winning the first bet), you could have placed a two-team parlay in the morning for $100 and it would have paid +200. Win both games, end with $300. Otherwise lose your $100.

Those are the basics of a parlay, but there are many points worth making about them, and I will start with that in the next column. ♠

Ed’s newest book, The Course: Serious Hold ‘Em Strategy For Smart Players is available now at his website edmillerpoker.com. You can also find original articles and instructional videos by Ed at the training site redchippoker.com.