The exponentially larger hit from a meager wager is the temptation of a parlay. It’s a type of betting that, instead of requiring a singular win to cash out on a bet, relies on a string of winning scenarios that—while unlikely to all happen—allows winnings to snowball from a two-digit wager to a six-figure payout. The seemingly low-risk, high-reward form of gambling has taken the sports betting world by storm.

“The real appeal of them is the kind of insane payout rate,” Joshua Grubbs, an associate professor at the University of New Mexico who studies gambling addiction, told Fortune. “You see small number, big payoff, which is appealing to people because it sounds like an amazing possibility.”

Though the winning bettors may seem like the big winners, it’s the sportsbooks that have cashed in on the growing fever surrounding sports betting. In 2024, the hobby generated $13.71 billion, a 25.4% increase from 2023, according to state regulatory data compiled by the American Gaming Association. 

Parlays are often the rainmakers for sportsbooks, with more than 70% of NFL and NBA bets on FanDuel coming from parlays in 2023, according to FanDuel parent company Flutter Entertainment.Parlays made up 56% of sports betting revenue in Illinois, New Jersey, and Colorado in 2021, The Wall Street Journal reported earlier this year. According to Rutgers University’s Center for Gambling Studies, New Jersey bettors lost $1.41 per dollar won in parlays in 2020. That’s compared to a $1.05 to $1 loss ratio for whole moneyline bets.

Moreover, parlay bets are getting more complicated as time goes on, decreasing the chances of winning. In 2020, the most popular parlays had five legs, Rutgers reported. The year before, two-leg parlays were the most popular.

“The notion of a parlay in general is so statistically unlikely to happen that it is one of the surest fire ways for the sportsbooks to just make the money off that,” Grubbs said.

The rise of parlays

The sports betting industry rocketed to success after a 2018 Supreme Court decision effectively struck down a ban on sports gambling, paving the way for 38 states to legalize the practice. Its popularity has even permeated the sports industry itself: This week the NCAA took a step forward in allowing athletes and department staff members to wager on professional sports following a Division I Administrative Committee approval of the shift.

With a swath of apps taking betting from the casino to one’s pocket, the industry has captured the interest of Gen Z, who saw a 7% year-over-year increase in online sports betting activity as of 2025’s second quarter, TransUnion found in a report released last month. The accessibility of online sportsbooks has capitalized on Gen Z’s love of gambling, with enthusiasts defending the practice as a form of investment.

For parlay betting in particular, there’s a dearth of research on why exactly it makes sportsbook customers tick, Shane Kraus, an associate professor of psychology at University of Nevada, Las Vegas, told Fortune. He said the betting type’s personalizable features (users can select the different legs of their parlays) as well as the ability to create bets after a game has started, make them especially appealing. Beyond offering incentives to refer platforms to others, emerging apps have also created ways to bet alongside friends, setting up leaderboards and teams of other users.

Then, of course, there’s the research suggesting alcohol consumption, often associated with sports spectating, is associated with larger wagers and more rapid loss of money.

“You’re excited, you’re upset, you’re drinking, and you’re watching a football game, and then you start doing parlays or live bets—I don’t think you’re probably going to make the best decisions,” Kraus said.

But Kraus, who studies gambling disorders, attributes the growing popularity of parlays less to the users, and more to the sportsbooks. Though sportsbooks’ advertising spending has remained flat at around $666 million in 2024, according to Neilson Ad Intel, Kraus said messaging from sportsbooks is everywhere, including during games and matches, when commentators walk viewers through over-under odds and parlays.

“It is creating a culture where it’s just all about money,” he said

Cracking down on sports betting platforms

Kraus said he fears there’s not enough being done of the apps to assuage users from placing more bets, or at least slowing them down. Gambling addiction, which impacts a little over 1% of the population, has led some to gamble away unemployment checks and even lose their homes.

Sports betting platforms, for their part, have made moves to put safeguards in place. FanDuel has set up a review system on its platform to look at a user’s hours on the site or language used with customer service teams that could trigger a review, the outcome of which could exclude a player from the platform through a “time-out” or imposing a deposit limit, a spokesperson told Fortune. About 90% of same-game parlays on the platform have a wager of $30 or less and 60% are for $5 or less.

“Our customers understand that these are fun, entertaining bets with a lower likelihood of winning,” the spokesperson said in a statement.

But University of New Mexico professor Grubbs noted that as long as making a wager is as easy as pressing a few buttons on a phone, “there is going to be a lot of potential for things to go sideways.”

“I don’t think these sportsbooks are out there saying, ‘Oh, we need to get people addicted to gambling.’ I don’t think that that’s what they’re trying to do,” Grubbs said. “I think they’re trying to make their product as accessible and appealing as possible, to get as many people involved as possible. 

“And what’s the net effect of that? Well, the net effect of that is sports betting has exponentially increased since 2018,” he concluded.