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How to maximize value by taking advantage of tournament overlays


If you're reading this page on the DragTheBar blog, then you're probably a serious student of poker who's always looking to improve your results at the tables. Some ways of increasing your profits, like watching strategy videos and analyzing your hand histories, involve many hours of study and work. Others, however, are much easier to implement immediately without going to any particular trouble. Earlier this month we explored how to improve your winrate by picking the appropriate type of account, VIP or rakeback. Making the proper choice in this regard could earn you hundreds or thousands of extra dollars per month depending on your volume of play. Today, we'll look at one of the best methods for enhancing your bottom-line in poker tournaments: overlays. An overlay refers to an MTT to which money has been added to the prize pool by the poker site. This acts as an immediate boost to your return on investment (ROI), and the only thing you have to do to take advantage of the situation is click on the “register” button in the tourney lobby.

Why Do Overlays Exist?

There are a few added-value tournaments, whether freerolls or other promotional specials, that have overlays on purpose. Then there are others that come about because the poker room misjudged participation levels when placing guarantees on events. If the number of entrants in an MTT is insufficient to reach the guaranteed total, then the site has to top off the prize pool until it matches the stated amount.

Examples of Overlays

We're in the midst of a tournament series that's overlaying hard right now. The Winning Poker Network is running $250 + $15 Million Dollar Sunday MTTs every week in January, February, and March. Each one pays out no less than $1,000,001. A little simple arithmetic shows that more than 4,000 people need to enter for the contributions from the players to add up to the guaranteed sum with the WPN keeping 100% of the fees. If more than 3,773 but less than 4,001 entrants show up, then the site will be effectively losing a portion of the rake in order to meet its commitments. And if 3,773 or fewer participants take to their seats, then the WPN will actually lose money on the event. So far, three of these MDS tournaments have run, and none of them attracted as many as 4,000 players. Two of them saw the network have to actually dip into its own pockets to make good on its promises while the third required the operator to forgo some of its profits from tourney fees.

The Effects of Overlays on ROI

Let's look at a concrete example using the numbers from one of the recent MDS tournaments to illustrate how worthwhile it can be to join overlay tournaments. On Jan. 14, only 3,407 individuals bought into the MDS event. This resulted in an overlay of $97,146 ($1,000,001 - (3,407 * ($260 + $15)). When we divide the prize pool – $1,000,001 – by the number of players, we see that the site paid back an average of $291.52 per entrant, more than the $265 they had forked over to participate. The average return on investment was around 10% ($26.52 profit/$265 investment). Compare this to what happens when there isn'tan overlay. Let's say that one week, 4,500 players enter, surpassing the $1,000,001 guarantee. Well, now the average payout per individual is just the same as the buyin less the tourney fee: $250. The ROI in this case is about -5.7% (-$15 profit/$265 investment). The presence of the overlay caused a jump of more than 15% in the field's return on investment! Breakeven players were effectively transformed into solid winners, and those who are normally decent winners saw their expected value approach that of absolute sicko crushers.

Don't Ignore this Opportunity

Nobody who's a dedicated poker player can just pass by a gratis bump in ROI on the order of 15%. If you're an MTTer who can afford the $250 + $15 buyin without violating the precepts of proper bankroll management, then the Million Dollar Sundays are an excellent investment. There are many overlay tournaments waiting for keen poker fans to join, both at the Winning Poker Network and at other cardrooms, and you'd be remiss if you fail to consider them while reviewing your weekly tournament schedule.

Example of Million Dollar Sunday overlay in progress Jan 28, 201

Example of Million Dollar Sunday overlay in progress Jan 28, 201

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