Poker tournament overlays are situations in which tournament organizers have to add their own money to the prize pool in order to meet a guarantee. This happens when a tournament promises a prize pool and not enough players show up and pay their buyins to reach the promised amount.
Guaranteed prize pool tournaments are common in the poker world. Casinos and poker sites host guarantees to make their tournaments attractive and to build loyalty among their players. The bigger the guarantee, the more attractive it is to players.
For example, let’s look at the Carbon Poker $100,000 Guaranteed Sunday event. In this event, Carbon Poker promises that the prize pool will always be at least $100,000 no matter how many players show up.
The buyin for that tournament is $215 and $200 of that goes straight to the prize pool. This means that at least 500 players must sign up for the tournament to reach its guarantee. So if only 450 players show up, the prize pool would only reach $90,000. Carbon Poker would have to add $10,000 to meet the guarantee.
That extra $10,000 is called “the overlay.” Overlays are a great thing for the players. The extra money that goes into the prize pool results in more money and less competition for every dollar of prize money.
Some poker sites have overlays more frequently than others. The Bovada Poker weekly $100K Guarantee frequently has an overlay. It’s almost become a sort of a calling card for them.
On the other hand, we have sites such as PokerStars that rarely have overlays because they have so many players. That’s not necessarily a bad thing either because busy poker sites generate massive prize pools.