What's an overlay?

DeepCroak · #1 10-06-2004, 03:07 PM

I've seen several uses in poker books of the phrase "having an overlay", but I've not been able to find a definition of what that means. Anyone care to enlighten me or give me a pointer?

Thanks!

P.S. I'm not a statistician at all, so a deep mathematical explanation is going to go right over my head. I'm just looking to understand the basic concept.

fnord_too · #2 10-06-2004, 03:27 PM

An overlay is when you are getting better than the true odds. For instance, you are getting 5-1 on a 4-1 shot, or a tournament that has a $50,000 guaranteed prize pool but only takes in $40,000 in entrance fees.

DeepCroak · #3 10-06-2004, 04:34 PM

[ QUOTE ]
An overlay is when you are getting better than the true odds. For instance, you are getting 5-1 on a 4-1 shot, or a tournament that has a $50,000 guaranteed prize pool but only takes in $40,000 in entrance fees.

[/ QUOTE ]

So, inotherwords, saying a bet has an overlay is just another way of saying the bet has a positive expected value. Right?

Thanks for the clarification!

fnord_too · #4 10-07-2004, 10:26 AM

As far as I understand it, yes. I personally don't use the term overlay where phrases like "pot odds" or "the pot was laying me the right price" would suffice, or to describe a table where I have a big advantage do to weak competition.

SossMan · #5 10-07-2004, 02:22 PM

betting on a fair coin and getting paid $200 when heads comes up and paying $100 when tails comes up.

goldcowboy · #6 10-07-2004, 06:08 PM

And where can I get a bet like this???

SossMan · #7 10-07-2004, 06:25 PM

[ QUOTE ]
And where can I get a bet like this???

[/ QUOTE ]

in TheoryVille

magiluke · #8 10-08-2004, 05:58 PM

I'm grabbing me some tickets to Theoryville tomorrow!

MrBlini · #9 10-08-2004, 06:51 PM

To add to what others have said, my impression is that it specifically refers to a situation in which some of the money is clearly dead, or that in some other way you can be quite certain that your expectation is positive.

For example, you have the table covered, hold AJs, and flop a gutshot royal flush draw on an unpaired board. Antonius moves all-in for $4,000, and Brutus calls all-in for $3,500. One of them is drawing all but dead, and you are receiving a nice overlay on your all-in call with 12 nut outs. You are indubitably a money favorite.