The Evolution of Same Game Parlays (SGPs)

Introduction

The advent of Same Game Parlays (SGPs) has revolutionized the sports betting industry, transforming a previously underutilized wager type into a primary revenue driver. Historically, bookmakers eschewed single-game combinations due to the inherent correlation risk, as traditional parlay mathematics assumes event independence. This limitation necessitated the development of novel pricing methodologies to accurately account for covariance.

Breakthrough and Popularization

A seminal breakthrough in SGP pricing occurred with the introduction of simulation-based pricing engines, pioneered by firms such as Banach Technology and Angstrom Sports. These engines leverage Monte Carlo simulations to calculate covariance instantaneously, thereby facilitating the creation of SGPs. The popularization of SGPs in the US market post-2018, led by FanDuel, was instrumental in gaining a significant market share advantage, largely due to their proprietary technology stack. This strategic move underscored the importance of technological innovation in the sports betting industry.

Economic Impact

The economic impact of SGPs on the industry has been profound, yielding hold percentages of 25–35% compared to approximately 5% for straight bets. This paradigmatic shift in focus from volume (handle) to margin (hold) has significantly altered the industry's landscape. The evolution of SGPs has further led to the development of SGP+ (multi-game combinations) and is currently integrating with micro-betting markets, underscoring the dynamic nature of the sports betting industry.

Conclusion

In conclusion, the evolution of SGPs represents a significant paradigm shift in sports betting, driven by advances in simulation-based pricing engines and popularized by FanDuel. The substantial economic impact of SGPs, characterized by a pronounced focus on margin rather than volume, underscores the importance of technological innovation and strategic decision-making in the industry. As the sports betting landscape continues to evolve, it is likely that SGPs will remain a critical component of the industry's revenue streams.