A poker tournament is a game type in which the participating players pay a set amount, the buy-in, into the prize pool, which they then play each other for. Each player gets the same number of chips in the beginning and is eliminated if he loses all his chips. There is a special form known as re-buy tournaments, where players to are allowed to buy chips again during the early phases of the tournament.
The prize money is distrubuted proportionally, or graduated according to placement and when a player went out. The particular payout structure determines which place gets money and what distribution key is used to dived the money up amongst the individual places. Special prizes or places in another tournament can also make up the prize pool instead of money.
Types of tournament
In the classical freeze out tournament form, a player is eliminated for good when he loses all his chips. Tournaments where only the first place player wins the entire pool are also called freeze outs.
In the early phases of the tournament, each player has the option to re-buy chips, should his stack fall below the size of his starting stack. Additionally, every remaining player usually has the option at the end of the re-buy phase to re-buy again, regardless of the number of chips he has. This is called an add-on.
A multi-table tournament is one in which thousands of players can participate at once, so that it requires several tables in the beginning. Over the course of time, tables are closed as players are eliminated and remaining players are redistributed to tables with free places. This goes until there is one table left, the final table, at which the winner is ultimately announced.
An S'n'G or Sit and Go is a tournament that starts when a pre-defined number of players have registered for the tournament. It does not start at a particular time like MTT's, rather, it could happen at any time as soon as enough players have joined.
A satellite is a pre-tournament or qualifying tournament, where participants can play for a seat in a larger tournament aired later. Often, only the top placed players, or maybe even the top player, get a seat in the later tournament. The buy-ins for a satellite are much smaller, meaning that there is the chance to play for a lot of prize money for a relatively small investment. Chris Moneymaker is a prime example, having bought into a satellite, or in fact a sub-satellite (a satellite tournament for a place in a satellite) for $40, he went on to win the main event of the WSOP, taking down $2 million in a tournament that would usually have cost a buy-in of $10,000.