Overlay is a gambling term that can be used to mean one of two things, depending on the context in which it is used. In the context of sports betting, the term refers to overly generous odds that favor the player, rather than the bookmaker. In the context of competitive gambling tournaments, an overlay is the amount of money the venue adds to the prize pool on top of players’ buy-ins.
Overlay (Sports Betting)
Sports betting overlays are wagers whose odds are so good that they actually favor the player, rather than the house.
Overlays found at small local venues are typically a result of an error, lack of diligence, or incorrect analysis on the part of the sportsbook.
Overlays found at large, reputable venues, on the other hand, are always premeditated and created for a purpose. This can be done for two reasons: to attract extra action to an event or to balance out a bet. In instances where an event is not getting enough attention from the betting public, overlays are used to drum up excitement for the event. On the other hand, in instances where the betting public is wagering heavily on the event’s favorite, overlays may be used as an incentive for placing bets on the underdog.
Overlay (Gambling Tournaments)
In the context of competitive gambling, the overlay is the amount of money the gambling venue adds to the prize pool on top of the players’ buy-ins. Let’s say there’s a poker tournament with a prize pool of $15,000 USD, the buy-in for the tournament is $200 USD, and 50 people end up attending:
| Prize pool | Money received from buy-ins | Overlay paid by the venue |
| $15,000 | $10,000 | $5,000 |
Overlay:
- a) sports bets whose odds favor the player, rather than the venue
- b) money added by the gambling venue to the tournament’s prize pool
