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Overlay in Poker

Overlay refers to the shortfall between a tournament’s guaranteed prize pool and the amount of money generated through player buy-ins. When an overlay occurs, the poker operator covers the difference, creating extra value for the participants. This situation often benefits players, as the prize pool exceeds the total amount contributed by buy-ins, effectively reducing the cost of participation.

Why Do Overlays Happen?

Overlays can occur for several reasons, including:

Low Player Turnout: If fewer players enter the tournament than expected, buy-ins may not cover the guaranteed amount.
Aggressive Guarantees: Operators may set high guaranteed prize pools to attract more players, even at the risk of creating an overlay.
Promotions and Marketing: Overlays are sometimes intentional, used as a marketing strategy to draw attention to the tournament or platform.

Regardless of the reason, overlays provide excellent opportunities for players to maximize value in a tournament setting.

How Overlays Benefit Players

An overlay is advantageous for tournament players because it improves the prize pool-to-entry fee ratio. Here are the main benefits:

Lower Effective Cost: Players essentially get added value without paying extra.
Reduced Field Size: Smaller turnouts make the competition easier, improving your chances of cashing.
Positive Expected Value: Overlays increase the expected value for every player, making participation more profitable in the long run.

For example, in a tournament with a $100 buy-in and a $50,000 guarantee but only 400 players (raising $40,000), each player benefits from an extra $25 in added value due to the $10,000 overlay.

FAQ

What is an overlay in poker?

An overlay occurs when the guaranteed prize pool in a poker tournament exceeds the total amount generated by player buy-ins.

Why do poker rooms allow overlays?

Overlays help attract players and promote tournaments, even though they may cost the operator in the short term.

Are overlays common in online poker?

Yes, overlays are more common in online poker, especially in tournaments with aggressive guarantees or during promotional events.

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