How Parlays Became the Biggest Bet in Sports

Alex Haberkern is 29 years old. She tends bar at a casino in Atlantic City.
And despite being surrounded by gambling, or maybe because of it, she doesn't consider herself a big gambler. When you work in the industry, it's kind of hard to want to go back and just like be there casually too.
Like I do go to the casino

occasionally, but I wouldn't say that gambling would be my favorite thing just because I see it every day. There is one thing she really loves betting on though, football games, using apps like FanDuel and DraftKings.
And one Sunday last December, Alex made a particularly wild bet. it was before I was going to work, and I had like a free $10 bonus.
It was like a last minute thing that I was like, it expired if you didn't use it. So I was like, okay.
Alex started stringing together a complicated sequence of bets. She bet that Justin Jefferson of the Minnesota Vikings would get 80 receiving yards, that James Cook of the Buffalo Bills would score a touchdown.

In the Steelers-Bengals game, she bet that both Jamar Chase and Najee Harris would find the end zone.

And then the rest just kind of kept going.

Most of them were just scorers.

Derrick Henry needed 80 yards.

Saquon Barkley needed 80 yards.

Jalen Hurts had to score.

Kyron Williams had to score. And then, of course, Cooper Cup needed 70 yards.
Alex wasn't just betting that these things would happen individually. She was making a bet called a parlay.
For Alex to get a payout, all 14 of those things needed to happen. And the odds of all of those things happening were long.
Very, very long. Like 66-yard field goal long.
But if the parlay worked, the payout would be massive. Let me see the exact payout.
Hold on. It was $21,921.
Almost $22,000 off a free $10 bonus bet. That's like life-changing money to me.
I'm planning a wedding. We're looking to build a house.
That could do a lot for me. So I was like, it's a free bet.
We'll risk it. So when you make this bet, how were you thinking about it? Were you like, this is silly? A hundred percent.
A hundred percent. I was like, this is so stupid.
And like, I tell my fiance my bets every week when I place them because he puts a couple things together, but it's like very small. Like he does very realistic things.
And I'm like, oh, you want to hear the like stupidity I have going today? And that's basically how it is. But sometimes you get lucky.
That dream of getting lucky has propelled parlays to the very center of the sports betting world.

And these long-shot bets are solving some big business problems for the gambling industry.

Welcome to The Journal, our show about money, business, and power.

I'm Ryan Knudsen. It's Friday, February 7th.
Coming up on the show, how parlays became the biggest bet in sports. This episode is brought to you by Indeed.
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How long have you been covering the gambling industry now? A little. Well, I've been covering it for five and a half years.
Changed a lot during that time. It has, for sure.
That's our colleague Catherine Sayre. And she says that lately, the sports betting industry has been going through some growing pains.
How's business for sports betting apps right now? Sports betting is still a relatively new industry in the U.S. So it's been a fierce competitive landscape.
DraftKings, FanDuel, these other competitors have just poured money into their marketing, advertising, giving away these bonus bets, as they call it, credits you can use when you sign up. And so they are under pressure to become profitable.
Despite this saying, the house can, in fact, lose. And this past NFL season, betting apps have been losing, and gamblers have been on a hot streak.

That's because people are more likely to bet on the teams that are favored to win.

And there have been fewer upsets in the NFL this year.

Yeah, so FanDuel and DraftKings

had to report to investors

that they're going to get less revenue

than they were expecting

because so many favorites won in the NFL season

that customers,

bettors, were beating the books this season. Combined, DraftKings and FanDuel expect to make

hundreds of millions of dollars less this year than previously thought because so many customers

have been winning. As the DraftKings CEO put it, the company had, quote, experienced the most

customer-friendly stretch of NFL sport outcomes we have ever seen. You know, we're talking about gambling.
No one can really predict the future. The sports book's going to do their best.
But, you know, what plays out on the field is out of their control. Another problem for the gambling industry has to do with its reputation.
Companies have faced criticism from lawmakers and gambling addiction advocates for relying on heavy gamblers for much of their business, or as the industry calls them, VIPs. VIPs are sometimes known as whales.
These are the bettors who are placing huge sums of money on games. So $10,000, $20,000.
And these are the most profitable bettors for these companies. So the companies have focused on them, giving them freebies, betting credits, tickets to games, just that VIP treatment that will keep them spending.

The problem with VIPs, though,

is that some of them are spending way more money

than they can afford to lose.

And gambling companies are required

to have responsible gambling practices.

You're talking about people who are spending

tens of thousands of dollars,

hundreds of thousands of dollars in some cases.

You know, companies are risking

fueling addiction through these programs. DraftKings and FanDuel have said they're

committed to promoting responsible gambling and protecting consumers.

So the companies really want to expand that casual better base, get people who bet less,

but bet regularly and more of those people to create that less risky customer base. Rather than rely so heavily on VIPs, sports betting companies are trying to court more customers like Alex.
I think I do at max like $5 for a parley, maybe $10 if I'm feeling like generous or I just won or something. Customers that don't bet a ton, but keep coming back for a good time and the possibility of that dream payout.
Alex had no expectation of winning her 14-leg parlay. Her elaborate bet was just for fun.
But as she was getting ready to go to work that Sunday afternoon, she said she started to notice something. Some of her bets were hitting.
For Pittsburgh. I think it was the end of the Steelers-Bengals game.
And a catch! Jamar Chase got his 80 yards. Beautiful grab by Jamar Chase.
That's when I was like, okay, this might happen. And I go to work.
We have all the TVs at work, so I was watching everything. And little by little, throughout my shift, things were happening.
Alex had needed the Texans' Nico Collins to get 70 receiving yards. He did.
And here's Nico Collins with a catch. She needed Jamar Chase to get a touchdown.
Step up, deliver. And he did too.

Touchdown, Jamar Chase.

Alex was starting to feel hopeful.

And she wasn't the only one.

All around her bar at the poker table, the excitement was building.

I had talked to my regulars about the bet,

so they were keeping me updated if I was busy doing little things. So they'd be like, oh, so-and-so just scored.

And I think little by little, I was like, okay, wait, maybe this has a chance.

How were you feeling when you thought you could possibly win this much money?

Oh, I was texting my fiance.

I was like, oh, we are paying for our wedding.

We're going on vacation.

We're doing this.

I have our honeymoon. I was just creating plans in my head.
I was like, oh, we are paying for our wedding. We're going on vacation.
We're doing this. I have our honeymoon.

Like, I was just creating plans in my head.

I was like, we got this, like, covered.

We're good.

Things were looking up for Alex.

With only a few bets left in her parlay,

it seemed like she was going to score.

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Parleys and sports betting have been around for a long time. But historically, the only kind of parlay you could do was to string games together, like betting that the Patriots, the Jets, and the Raiders would all win on the same day, which this NFL season was extremely unlikely.
But a few years ago, FanDuel got an idea.

So FanDuel's parent company, Flutter, has a sports betting brand in Australia called SportsBet.

And they heard from a gambler who was like,

hey, I know I can make a parlay bet on different games,

but why can't I make some predictions within one game and bet on that? And so the math behind that's complicated. They got to work on it and they figured it out and started offering it.
The same game parlay was born and FanDuel brought it to the U.S. in 2019.
Now you could string string together a bunch of bets about what would happen in a single game. Like that Patrick Mahomes and Jalen Hurts would both throw a touchdown pass, which during this weekend's Super Bowl is extremely likely.
When did you start to see it really kind of take off? Like, when did you start to see consumers really responding to them? Same-game parlays took off almost immediately. As soon as Fandle put these out, the companies could tell it was taking off.
The competitors all quickly followed. Now, ads for parlays are everywhere.
The same-game parlays on Fandle are the best way to bet on your favorite players. Former NBA star Charles Barkley pitches his same-game Barclay, and comedian Kevin Hart shares his picks on social media, sponsored by DraftKings.
That is my week one touchdown parlay. You're welcome.
But the hype isn't just coming from paid spokespeople. Parlays have taken off in social media.
Finally, we hit a parlay! We hit a parlay! Monday's bet hit. Last night's bet hit.
Did the Sixers make us sweat it a little bit? Yeah, but of course that's what they do. It's become its own little ecosystem doing the marketing for these companies, right? So people who are touting their big wins, they're posting their bet slips, which is, you know, shows their parlays.
They say, follow along with me. Tail me, which means make the same bet.
Let's see if we can win this. By the time the 4 o'clock games were kicking off, Alex was starting to think that she could win her bet.
Each leg kept hitting. Joe Mixon had scored a touchdown, and Mike Evans got one too.
Her bet went from looking like a ridiculous long shot to something that could actually happen. And then the L.A.
Rams took the field.

Alex needed running back Kyron Williams to get a touchdown, which he did.

And she needed wide receiver Cooper Cup to get 70 receiving yards,

which was one leg of her bet that actually had pretty good odds.

So I think it was around halftime of the Rams game.

And I had checked the stats because I wasn't really paying attention because I had gotten busy. And Cooper Cup had 17 yards.
Former Super Bowl MVP Cooper Cup. A little more than halfway through the game, he was more than 50 yards short of what Alex needed.
Still, it wasn't over yet. So I was like, okay, it's okay, possibly.
And then I think the third quarter happened and I was on break and we have a TV in the break room. And he still, he wasn't even getting the ball.
Like there wasn't even targets. There was nothing.
Like he basically was just dead to the Rams team. And he's normally a receiver that catches a lot of passes.
Normally, yeah. And at that point, I stopped looking.
I didn't want to know. I didn't because I was like, I don't care how many yards he has at this point.
Like, it's going to lose. So I think by the third quarter, I just called it quits.
And I was like, maybe I'll just get lucky, open my phone, and my balance will say $22,000. Cup never had another catch.
It was his second worst game of the season.

By the end of the day, every single one of Alex's other bets hit.

13 out of 14.

Cooper Cup was the only player who didn't deliver.

Alex's $22,000 dream had disappeared.

Alex had beaten the odds,

but not enough to win.

And that's what betting apps are betting on.

Bettors just lose more on parlays. The odds are so long.
So for example, FanDuel is offering a

four-leg same-game parlay on the Super Bowl this weekend, where you're going to bet that Saquon

Barkley, Xavier Worthy, Kareem Hunt, and Jalen Hurts will all score a touchdown in the game. If all that happens, someone who bet $10 would win $170 as of Friday morning.
But the implied probability of all those bets hitting is less than 6%. By comparison, someone making a standard bet, like that the Chiefs will win the Super Bowl, according to one betting app, the implied odds of that are a nearly 55% chance of winning.
That's a big difference. It's huge.
It's huge. And you would think gamblers might shy away from that, but apparently they're not.
I know that generally with gambling, the odds favor the house. But did the odds favor the house more with parlays? Sportsbooks are trying to protect their bottom line.
How they set the odds are critical to their business. With parlays, the setting of odds gets really complicated because what you're betting on, those events, how a quarterback performs and how a tight end performs, they're tied together.
So if the quarterback's having a terrible game, good chances are the tight end won't be having a great game either. So they use lots of math, modeling, looking at what's happening in sports news to set these odds.
But they're going to figure out what they think are the actual odds of that parlay. And then they're going to set the odds even more in their favor to protect their bottom lines.
And to a certain extent, it's sort of a mystery about how they're doing this. However they're doing it, it's working.
Today, parlays represent a huge chunk of the sports betting business. In Illinois, New Jersey, and Colorado, states that break out this data, parlays accounted for about 56% of sports betting revenue last year.
So it's clear that the companies see this as the future of the business. So are you making any bets for the Super Bowl this weekend? I haven't even looked, honestly.
I'll tell myself I won't do it, and then I'll probably pull it up Sunday morning right before I go to work and be like, you know what, let's place a couple just to make it interesting for myself because I don't really care about who wins. And do you think that you'll do a parlay bet?

Yes, always.

I'm never going to pick one side.

I always have to do the parlay.

It makes them more interesting.

Back at the casino where Alex works,

her close call on that 14-leg parlay has become a bit of a legend.

Her regulars still bring it up.

I still have some come in.

They're like, oh, do you remember the day we were all sitting here and you were supposed to win? But I had a guy that I was, his name's Mike. He was sitting at the bar with me on Sunday because I work Sunday nights.
And he's like, I still can't believe that Cooper Cup, blah, blah, blah. He's like, I haven't placed a bet on him since that day.
So it gets brought up a couple of times. Is there anything that you'd like to say to Cooper Cup here on the podcast who did not meet his target? No, I mean I'm upset it's okay Cooper, I forgive you, I guess but you know, a little compensation for losing my belt would have been nice That's all for today.
Friday, February 7th. The Journal is a co-production of Spotify and The Wall Street Journal.
Additional reporting in this episode by Isabella Simonetti. The show is made by Catherine Brewer, Pia Gadkari, Rachel Humphreys, Sophie Codner, Jessica Mendoza, Matt Kwong, Kate Linebaugh, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alessandra Rizzo, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhi, Jivaka Verma, Lisa Wang, Catherine Whalen, Tatiana Samis, and me, Ryan Knudsen, with help from Trina Menino.

Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard.

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Thanks for listening. See you Monday.