The compounding impact of the commission/fee taken shows first-hand why the fees matter and there’s no better way to showcase that impact in the fan-favorite parlay. Let’s breakdown a 5-leg parlay into each component and we’ll start with a no-commission model:
Bet 1 of $100 at +100 to win $200
Bet 2 of $200 at +100 to win $400
Bet 3 of $400 at +100 to win $800
Bet 4 of $800 at +100 to win $1,600
Bet 5 of $1,600 at +100 to win $3,200 for a final payout of $3,100 ($3,200 - $100)
Essentially, a 5-leg parlay is a bet that you’ll go 5-0 on outcomes while you rollover the winnings from one bet to the next bet. It’s extremely popular as a small entry fee can reap huge gains as noted above that a $100 bet can win $3,200 at +100 odds across the board.
Now, let’s introduce a fee (as witnessed by the -110 price or 4.57% fee) on the parlay to showcase the impact that fee has on taking away potential winnings.
Bet 1 of $100 at -110 to win $190.91
Bet 2 of $190.91 at -110 to win $364.46
Bet 3 of $364.46 at -110 to win $695.80
Bet 4 of $695.80 at -110 to win $1,328.36
Bet 5 of $1,328.36 at -110 to win $2,535.97 for a final payout of $2,435.97 ($2535.97 - $100)
Essentially, by betting with fees in this instance, you can see the compounding impact of the fee takes $664.03 of winnings away from your $100 bet that you should have had the opportunity to win. The math to determine the fee works out as follows:
1 - (amount paid out) / (amount could've paid out without fees)
1 - (2,435.977 / (100+200+400+800+1600))
1 - (2,435.87 / 3,100)
21.42% = The total fee taken from your winnings that you should’ve received had you bet in a no-fee or no-commission market.