What is overlay?

Those comments were posted in this thread, but I don't want to take it off-topic: How can we improve Bodog???

What is overlay, and how does late registration affect it

Overlay is the amount the site has to pay to cover a guaranteed payout that isn't covered by buy-ins.

example $200K guaranted.

If 5000 people buy in for $25.00+2.00 the the sites overlay to guarantee 200k in payout is $75k.

...and the first quote was actually talking about the prize structure in specific instances, don't think he/she knew what overlay was either.

Overlays sometimes happen in guarantees when not enough people register, but the Pokerstars 500k$ on the 28th is actually guaranteeing overlay (a holiday gift I suppose) as the maximum entrants is 35k x $10

Overlay= Free moneys .

Basicly if there is 1$ buy-in 100$ guarantee and only 70people register there is a 30$ overlay witch make the tournement more ev+.


edit: What Steve and Dw said......

OK, thanks for clarifying that. Nobody would really complain about overlay, then, except maybe the bank manager of a poker site with a lot of overlaid tournaments?

the overlay part of the payout is the gravy, everyone's buy-ins are the potatoes. and gravy is good! what sucks though is when they pre-post the payout structure based on a certain # of entrants but change it when the tourney starts to actual payouts base on the real # of entrants. why not reward those who signed up for the tourney with a nearly gaurateed prize?

I think everyone knows that poker sites are in the business to make money so I dont think overlays happen all that often ... maybe occassionally that might have a torueny with a bad turn out but I think they can generally predict at what buy in will cover a guarnatee of any amount of money I dont think overlays happen very often at all

I think there are a lot more tournies with overlays than you think. A number of the guarenteed ones on Bodog and UB routinely have overlays, at all levels of buy in. Heck I've even seen it happen on FTP as recently as a few weeks ago.

Yes, there are some. Many disappear by the time a 'late registration' period is over. The recent FT overlays could easily have been due to the holidays as well as that being the period that Stars was holding their Record Week with a lot of added payouts. Attracted a lot of players who might otherwise have been playing on FT.

Can't address Bodog since I only play the CC events there, but UB is easy to understand. They have lost a ton of players. I suspect they are studying the overlay cost and will adjust as future results are analyzed. I've seen a lot of their MTT's start with fields that look more like SnG's.

It's also hard to analyze a field size and overlay if it had satellite entries. The rake derived from the prior satellites often covers what 'seems' to be an overlay for the site.

I don't agree with that, there seem to be a lot of Bodog tournaments guaranteeing a lot more than the entry fees alone would cover. Some of them are rebuys, but not all.