Single-game parlays have become a popular product for players despite their longer odds and some of the leading U.S. sports-betting operators are riding the popularity of high-margin parlays to higher market share.
In New Jersey, which separates parlay bets out from single-game wagers in reporting revenues, parlay wagers represented about 56 percent of operator win in 2021, and in the first seven months of 2022, it accounted for 61 percent of operator win.
Overall, high-margin parlay bets drove 24.4 percent of handle and 53.7 percent of gross revenue in July, with the gross win margin from multi-leg bets coming in at 18.1 percent versus skinny wagers at 13.5 percent in June and an outsized 24.1 percent a year earlier.
The most successful of the operators have been FanDuel, which led the way with its Same Game Parlay product in 2019 and has since rocketed to the top of the U.S. market share leaderboard, touting a 51 percent U.S. market share in the second quarter of 2022 during a recent earnings call with analysts.
In the second quarter, the company said, more than 80 percent of FanDuel sportsbook players placed a parlay bet.
“This would not be possible without the best in-class pricing and risk management capabilities within the group, which underpin our product superiority,” Peter Jackson, CEO of FanDuel’s parent company Flutter Entertainment, said during the earnings call.
“Our product ensures that we are monetizing our customers more effectively than anyone else and delivering the maximum return on investment.”
Jackson touted the ability to offer and price the parlay products in house as a significant advantage.
“The fact that our parlay products have been developed in house and the pricing in house means we keep all of that incremental margin, and we have a far superior customer proposition as a result,” he said.
In addition, the stronger parlay performance has helped guide the company’s strategy on customer acquisition.
“We've always been very much focused on looking at the ratio of our acquisition cost to lifetime value, and we continue to see advantages around the lifetime value of our customers because of our parlay penetration and other benefits we get from our very strong product,” Jackson said.
DraftKings launched its own single-game parlay product last August, and the company said it saw a 17 percent increase year-on-year in the second quarter in parlay products.
“Enhancing our parlay offering has been a top priority,” said CEO Jason Robins, touting new features the company has added, including the ability for customers to void a single leg of a same game parlay, as well as new features the company looks to add, including the ability to combine multiple same-game parlays into a single parlay.
The company has also looked at different ways to market specific themed parlays to customers.
“Really, for us, it's about having it feel native, not feel like we're pushing something on the customer, we use fun names that are in line with the sorts of things that we would name our daily fantasy contest, that sports fans we think would find enjoyable and at times humorous and just try to give them some personality,” Robins said.
“And really, it's all data based, so we test things to see what works,” he said.
BetMGM also expects to improve its own one game parlay offering during its upcoming redesign.
The company said during an investor day presentation earlier this year that one-game parlays were responsible for more than 27 percent of bets on February’s Super Bowl, and more than 22 percent of bets on the Final Four weekend of the NCAA Men’s Basketball Tournament.