The Collaborative International Dictionary of English v.0.48:

parlay \par"lay\ v. t.
   1. To wager the winnings plus the initial stake of one bet on
      a subsequent wager, or to engage in a series of such
      increased wagers.

   Note: This is the characteristic act in a common betting
         system used by gamblers to try to achieve a large win
         from a small initial stake. Statistically, it is
         similar to betting a small stake on a game with a large
         payoff and a proportionately small chance of winning.
         [PJC]

   2. To exploit success in one endeavor so as to achieve
      greater success in subsequent endeavors.
      [PJC]

   3. Fig., to transform a gain into something of greater value.
      [PJC]

The Collaborative International Dictionary of English v.0.48:

parlay \par"lay\ n.
   The act of betting the winnings from a prior bet, plus the
   original stake, on a subsequent bet; the second or later such
   bet in a series; also, a series of such bets, with the stakes
   for later bets coming from the winnings of earlier bets.

   Note: This is the characteristic act in a common betting
         system used by gamblers to try to achieve a large win
         from a small initial stake. Statistically, it is
         similar to betting a small stake on a game with a large
         payoff, but with a proportionately small chance of
         winning.
         [PJC]

WordNet (r) 3.0 (2006):

parlay
    n 1: a series of wagers in which the winnings from one wager are
         used as a stake for the subsequent wagers
    v 1: stake winnings from one bet on a subsequent wager [syn:
         parlay, double up]

Moby Thesaurus II by Grady Ward, 1.0:

55 Moby Thesaurus words for "parlay":
   add to, aggrandize, amplify, ante, ante up, augment, back, bet,
   bet on, book, boost, broaden, build, build up, call, chunk, cover,
   enlarge, exalt, expand, extend, fade, fatten, fill out, gamble,
   handbook, hazard, hike, hike up, increase, inflate, jack up,
   jump up, lay, lay a wager, lay down, lengthen, make a bet,
   maximize, meet a bet, pass, play, play against, plunge, punt,
   put up, pyramid, raise, see, shot, stake, stand pat, thicken, up,
   wager