Someone please explain what "Overlay" means

[Sarge85]

I see the term "Overlay" kicked around quite a bit.

In laymans terms can someone break this down, and explain what I should be looking for when it comes to "overlay"

Sarge[img]/images/graemlins/diamond.gif[/img]

[jslag]

Example:

You and 99 other people register for a $5,000 Guaranteed tournament that is a $5 buy-in. That's $500 in the prize pool. The remaining $4,500 in the prize pool provided by the tournament site/casino is considered 'overlay'.

[SossMan]

It's just another term for +EV. Usually used in quantity context.
an example:
Someone wants to play you heads up for $100. You are equally skilled. Then, Bill Gates walks by and throws a billion on the table and says "winner take all".

That's overlay.

[fnurt]

An overlay might be considered the same thing as having favorable pot odds, but you can use it in a wider variety of contexts.

For example, say there are 3 players in the pot, but you are even money to win. Your bet has an overlay because if you win, you will be paid off at 2:1.

Let's say you are about to enter a tournament where you are of average skill, but the tournament sponsor suddenly decides to add $10,000 to the prize pool. Now your entry fee has an overlay.

Bob Ciaffone likes to talk about playing starting hands that have an overlay. What he means is, you only enter a pot with a hand that is strong enough that it rates to be a significant favorite over the range of your opponents' holdings. A "marginal" or "speculative" hand would not have an overlay.

I realize this was not exactly a dictionary definition, but I hope it helped.

[Sarge85]

Thanks all so far.

I was looking for a definition in the context of entry fee compared to Prize pool. For instance Pokerroom has a $20000 nightly gurantee. I think i looked earlier, and only 19 people were entered. - It cost 20+2 to enter...thus what's my "overlay" - or am I comparing apples to oranges?

Sarge[img]/images/graemlins/diamond.gif[/img]

[davidross]

You have a huge overlay there, to calculate it accurately you would have to know exactly how your ability comapres to everyone else, etc. But assume you are an average player then your share of the 20K pool would be 1K, and you are putting in $20, your overlay is in the area of $980.

[MicroBob]

poker-room's guaranteeds are usually 10k I think (15k on Friday).

Since they are getting more than 500 players (500 X 20 = 10k) almost every night there is no overlay on these.


Sometimes the Empire tourneys have a bit of an overlay.
For example, the Sunday night 50k guaranteed tourney that costs $100+10 to enter.
They need 500 players for it to be an 'even-deal' for the site.
But since they frequently get around 380 players that works out to a modest overlay for the players.

The players are only paying $38k to the prize-pool....yet the site is paying-out $50k.
You can look at it as everyone getting a $130 entry to the tournament for only $110 (or something like that).

[MicroBob]

One other thought:

It amazes me when I see the chat in the poker-room lobby regarding the guaranteed tourneys.
There will frequently be 1 or 2 people actually rooting for the total number of entries to surpass 500 players. They don't seem to understand that the fewer number of players that enter, the better the value of the tourney.

Once it gets past 500 players then they just increase the total prize-pool like they normally would.


The number of players who ask what "10k guaranteed" means is kind of weird as well. They either think it costs $10k to enter or that first place pays $10k or that there is no way a $20 tournament can have $10k in the prize-pool.

[Cheno5]

Good point about rooting for more players, but PokerRoom pays 60 places at 501+, and 40 at <501. That's why some players root for more people....it means you don't have to place as highly to cash.

Having said that, I'd rather the prizes be higher than more frequent.

[Cleveland Guy]

I am at work, so I can't look right now, but I think they are increasing their guarantees. I believe this fridays is $25K with rebuys, and they will be rolling out something new every week.

But you are right, there were overlays when they first started, but now they are gone. I think the Friday sometimes still has a small overlay.