GGMasters - Overlay Edition - What is an overlay?

In poker, an overlay refers to a situation where a tournament's prize pool exceeds the players' total buy-ins. This creates a situation where the tournament operator must make up the difference, essentially "overlaying" their own money into the prize pool. This benefits the players by increasing their expected value, as they effectively play with "house money."

For example, if a tournament has a guaranteed prize pool of $100,000 and only generates $80,000 in player buy-ins, there would be a $20,000 overlay. This means that the players are effectively playing for more money than they have contributed, creating an opportunity for them to win a larger prize.

Overlays are generally seen as a positive for players, as they increase the value of the tournament and offer the potential for larger payouts. However, they are also a risk for the tournament host, as they must cover the additional funds if the tournament needs to generate more player buy-ins.