To elaborate, a traditional PARLAY move is when one bets the original wager plus all the winnings. A wager of confidence or recklessness or luck. Nothing to lose; everything to lose. Interestingly, the first definition implies the act, while the second suggests success.
So, which is it? Perhaps it's a paradox—to successfully PARLAY is to assume success, while success must be proceeded by the act of the PARLAY—an act of blind faith, so to speak.
Apparently, the word PARLAY holds significance within the world of pirates—at least, according to Pirates of the Caribbean, which I would say is the authority on modern pirate culture. The word has something to do with the "pirate's code;" here is the context:
"PARLAY! I invoke the right of PARLAY! According to the Code of the Brethren, set down by the pirates Morgan and Bartholomew, you must take me to your Captain!"
Okay. The "right of PARLAY." Still a bit vague; I take PARLAY to mean either a) take me to your captain, or b) a sort of get out of jail free card...? Perhaps declaring such a right is a gamble of sorts. I mean, I guess anything declared to a bunch of pirates would be a gamble.
(More about pirate codes here.)
Regarding the Pirates of the Caribbean series: I went to one showing of the first film in a $3 theatre and ended up fooling around with my date the entire time. What was I PARLAYING? A reputation (if I had one), the future of my relationship with this fellow, and my $3. Or, rather, his $3. And I would say we PARLAYED that $3 into way more than its intended worth.