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  • October 1, 2020

What is Overlay?

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In a poker tournament occurs when a poker room has to add money into the prize pool for a tournament because not enough players entered to meet the guarantee.
Suppose a poker room runs a $100,000 guaranteed prize pool tournament. The buy-in is $100+$9, and only 800 players enter. Normally, the prize pool would be $80,000. Since the poker room guaranteed the prize pool would be at least $100k, it would have to add $20k to the prize pool. This additional $20k is considered the overlay. All prizes in this tournament are 25% larger than they normally would be had there been no guarantee.
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Advantage of Playing in Poker Tournament Overlays
There are two huge benefits to playing in tournament overlays. First and foremost is the added value the tournament provides players based on the buy in vs. the amount of the prize pool. As an example, let’s say a tournament guarantees a $75,000 prize pool and each buy in costs $125. The tournament would need to draw in at least 600 players in order for the event to pay for itself. If say for example the playing field fell short by 200 entrants, the poker room would need to add a total of $25,000 to the prize pool to offset the guaranteed amount. This means that a $75,000 GP has a value of $187.50 per player, even though each player only paid $125.
Using a real tournament payout structure let’s say a tournament guarantees a $10,000 prize pool with a buy in of $5.50. The tournament draws in 3600 participants, and because of that the prize pool jumps from $10,000 to a whopping $19,500. In order for a player to cash in this event they would need to place in the top 450, and even then, the tournament won’t pay anything significant until 15th place where you see a $50 return on your original investment. Now if we were to look at as an overlay. That same tournament draws in 256 players which generates a total of $1408 in buyins, giving each entry a cash value of $36.06 instead of the original cost of $5.50. The lack of entrants also forces the poker room to kick in an additional $8592 into the prize pool. In this scenario the event would pay a total of 36 places with 15th place receiving 1.35% of the prize pool which amounts to $135. Of course the payouts will differ dramatically since the playing field is significantly smaller but the ROI a player sees on his original buy in this event is that much greater than the other tournament.
The second benefit is of course the playing field. While the major poker tournaments offer millions in cash for their tournaments, these events will draw in thousands and thousands of participants. With the huge play field the average player will rarely ever make a final table. In fact, most poker players will never see a final table playing these big events regardless of how many attempts they make. In an overlay, the playing field is marginally lower than what you would find in the big events and because of this it’s significantly easier to cash in an overlay than it is in a highly populated poker tournament. Think of it this way – how many final table events could you make with a playing field of 85 or 100 players vs. a tournament that attracts 2000 or even 3000 players.
In the end, the overlay poker tournaments give you more bang for your buck and provides players with a better ROI.
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