What is an overlay in sports pools?

As BeefLoaf and I begin to delve into the world of sports pools, a term that you might hear us say is “overlay”. Now granted, that word coming from us, you may think we’re quoting our dear friend Rodney St James who often says he’s “over laid and under paid.” But we’re actually talking about an advantageous situation that occurs in sports pools as well as poker.

The situation is when the guaranteed pot is a higher dollar amount than the total amount the participants have put in. Guaranteed is the key word here. You may see a situation like this, but upon further investigation find that the pot can be resized. When the pool creator guarantees $100k, the buy in is $100, and there are less than 1000 participants, you have an overlay.

You may ask why this advantageous. It’s because you are getting more value out of your entry than a normal pool. In the example above, let’s say there are 500 participants. In a breakeven situation for the pool creator, the value of your entry would be $100k/1000 = $100. If they sell past 1000, which is common practice, your value is lower than what you put in. Let’s say they sold 1100 spots, it would be $100k/1100 = $90.91. But in the situation where only 500 spots have sold, your value would be $100k/500 = $200. If you saw a bet that should be +200 but it’s paying out +400, I assume you’re betting it. This is the same principle.

Now, there is still skill to these games and you should assume there will be some sharp players. If you are not sharp, it’s also important to look at the pay tables. While you may be getting value, if the pool only pays a single prize, it’s still a long shot to win. However, if you find a situation where they guarantee a pay out over the buy-in to the top 300 and only 250 ppl are in, you probably wanna get a taste. Especially if the pool starts very soon.

-Chorizy-E