If you are a Pay Per Head bookie and have been paying attention to what some of your competitors are doing, you have noticed that many of them use parlays with potential earnings of several hundred thousand dollars to promote their business.
In the eyes of a novice bookie, this may seem risky and even crazy. As these bookies tell their bettors to place bets on parlays, which in some cases deliver winnings of up to $30,000 for a small bet of $30.
But the truth is that this is a great strategy to attract bettors and generate good cash flow for the business.
Below we explain how it works.
Cognitive biases
First, we must understand why this type of parlays is so attractive to gamblers.
It’s all about cognitive biases that make the bettor believe that the parlay offers greater value than it actually has.
For example, the bettor’s cognitive load is manipulated by presenting in a simple way that with only $30, he can get a profit of $30,000. This makes the bettor not think about the risks and the real probabilities that the result posed by the parlay happen. The only thing the bettor sees is the potential profit that he will obtain with a very low investment.
Also, Fitts Law makes the bettor think that it is effortless to aim at the bigger target that the parlay presents. And does not think about all the variables necessary for that result to come true.
In short, the parlays play with the gambler’s cognitive biases and make them lose perspective of reality.
Big potential winnings
At first glance, the parlay we use in our example seems only to benefit the bettor. But in reality, the one who has the best chance of making a big profit is the bookie.
Parlays that give out large amounts of money usually do so because they combine two or more outcomes with little chance of happening.
In other words, it is improbable that a bettor will win the parlay, so if the bookie takes a lot of bets for a parlay that has little chance, he will get a good profit.
The bookie needs to note that while bettors are unlikely to win the parlay, it may be the case they do.
The bookie must be ready to face a situation in which bettors win a great parlay. Since in that case, they must make use of the business bankroll to pay the bettors.
Bottom line, big win parlays are a great way to attract bettors into the business, but they must be managed carefully and have the resources to deal with any situation.
