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Contract choice, parlay adoption, and sportsbook margins

Author

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  • Borghesi, Richard
  • Salaga, Steven
  • Williams, Jared
  • Mondello, Michael

Abstract

We examine bettor contract choice using all 547 million NFL wagers placed at a large, regulated U.S. sportsbook during the 2018–2023 seasons. Over this period, bettors shift markedly away from single-leg wagers toward multi-leg (parlay) contracts that embed higher operator margins. Cohort-level evidence and bettor fixed-effects estimates indicate that this increase in parlay participation occurs within the same bettors rather than through changes in sample composition. Panel estimates show that greater parlay usage is associated with meaningfully higher bettor losses, holding wagering volume and total stake constant. Overall, the evidence indicates that bettors reallocate toward higher-margin contract structures in a setting where intermediaries design and offer contracts with distinct payoff structures and embedded margins.

Suggested Citation

  • Borghesi, Richard & Salaga, Steven & Williams, Jared & Mondello, Michael, 2026. "Contract choice, parlay adoption, and sportsbook margins," Finance Research Letters, Elsevier, vol. 105(C).
    • Handle: RePEc:eee:finlet:v:105:y:2026:i:c:s1544612326007464
    DOI: 10.1016/j.frl.2026.110218
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    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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