Poker Basics - Overlays

Our guide for newbies today is all about why it's a good thing, for players at least, when a tournament misses its guarantee.

One easy way to increase your winnings in poker tournaments is to look for the MTTs with the biggest guarantees for your bankroll. It stands to reason if you can afford to play $11 MTTs and one tournament has a $2,000 guarantee and the other tournament has a $1,000 guarantee, you will be competing for bigger prizes in the first one. 

A guarantee is when an operator commits to their customers that the prize pool will reach a certain amount. In the $2,000 example above, if the rake is $1, they are essentially saying they believe 200 players, or more, will enter the tournament. Often a guarantee is enticing enough that it easily gets eclipsed, so you might even be playing for a $3,000 prize pool in the example above.

But what happens when 200 players do not enter the tournament? What if only 150 players enter the tournament? In that instance the operator has to put in the extra $500 themselves (or $350 if they don't take out the rake). This is what is known as an overlay. 

An instant equity boost

An overlay is a good thing for poker players and a bad thing for poker rooms (though they often use it as a loss leading marketing tool). In the example above it essentially means you are playing for the prize pool of a 200 runner tournament but you only have to navigate through a 150 runner field. 

Another way of looking at it is an overlay automatically increases your equity, that is the value of your chip stack. In the example above at the start of the tournament your equity is $10 ($11 minus $1 rake) before you factor in the overlay. However, with the overlay included your equity is $13.33. That is the value of the average stack when you divide the $2,000 guaranteed prizepool by the 150 players. 

That is a 33% boost to your equity without you having to do anything. If you late register your equity would be even more because late registration also boosts your equity. 

This is why it is a skill in itself to keep an eye on the lobbies of poker tournaments to see if a tournament looks like it will overlay. This is especially the case if an operator has just launched a special series which boasts big guarantees. 

Generally speaking it is better that poker rooms exceed their guarantees rather than miss them. In the example above you will ultimately have a better career if that tournaments generates a $3,000 prize pool rather than have a $500 overlay because you will be playing for much bigger prizes. 

But when you see a juicy overlay in the tournament lobby it is a low hanging fruit you have to make the most of as a poker player, because they happen rarely. 

Related Resources