Definition of overlay

When you use the word "overlay" it's almost always in a poker tournament. An overlay occurs when a tournament's cash collateral is greater than its number of entries. Let's take a simple example to make it clear. A tournament is announced. The entry fee is 100€ (forget about the commission fee for now, it's not important for our example). The tournament announces guaranteed cash prizes of €10,000. So if 100 players register for the tournament, the tournament organizers will have reached their goal. But if only 80 players sign up for the tournament, even though the tournament organizers will only have accumulated €8,000, there will still be €10,000 in prize money, so an overlay of €2,000. It is the game room that will lose €2000 and the players that will win €2000.

The hunters of overlay

Generally, the most popular poker rooms will have almost no tournaments with overlay, and the cash prizes announced will always be relative to the number of entries. But if you go to slightly less well-known gaming rooms, you may find tournaments with overlay's. Some tournament players are chasing this kind of tournaments. When you find a tournament with overlay, it's like playing a tournament with a higher buy-in, but paying a cheaper entry fee.


<< Return to poker lexicon