If a tournament guarantees $100,000 and entries produce only $80,000, the organiser adds $20,000. That $20,000 is dead money divided among the field.
An overlay is one of the few situations in a casino where the arithmetic favours the player before any skill is applied. Every entrant's expectation rises by their share of the added money.
They are rarer than they used to be, since organisers set guarantees more carefully, and they usually appear in small online events or at awkward times of day. Serious players watch for them precisely because the edge does not depend on being good.
Spotting one before registration closes is the hard part, since prize pools are only final at late registration cutoff. Online it is usually visible in the lobby, which shows entries against the guarantee in real time. Live, it is a matter of counting tables and doing the arithmetic yourself, which is why overlays in live poker are frequently claimed and rarely verified.
Related terms in tournaments
- ICM — Independent Chip Model: the conversion from tournament chips into real money value.
- Bubble — The point at which the next player eliminated finishes just outside the money.
- Chop — An agreement among remaining players to split the prize pool rather than play it out.
- Guarantee — A minimum prize pool the organiser commits to regardless of entries.
- Freeroll — A tournament with no entry fee, or a situation where you cannot lose but might win.
Where an entry quotes a number, that figure comes from the computed sections of this site rather than from another glossary, so the definition and the derivation cannot drift apart. Each entry links to the page where the number is worked out.