Overlays are good for poker

With the Sunday Million 12th Anniversary failing to meet its guarantee just now (attracting just 43,975 players, when it needed 50,000 players) it’s worth addressing a  theme has risen in the poker world over time: that it is “bad” when a tournament fails to attract enough entrants to cover the guaranteed prize pool, and that it is “good” when a tournament wildly exceeds the guaranteed prize pool level. Both of these views are wrong for poker players, and wrong for the game more broadly.

First and foremost, guaranteed tournament prize levels are a marketing device by poker tournament operators (both online and offline) to attract players and ensure that there is a critical mass of players who are able to play. Clearly, it is better for a tournament operator – and a tournament player – for there to be more players, and guaranteeing a prize pool is just one tool to try to increase that number.  Guaranteed tournament prize pools can be particularly helpful in attracting the first few players to register, since knowing that the prize pool will be a certain level can persuade a player that it is worth dedicating the time, effort and money to play.

sunday million 12th

From the point of view of a player, it is fairly obvious that the higher a tournament guarantee, the more attractive a tournament is. A guaranteed prize pool of $1million might be worth travelling to, whereas a guaranteed prize pool of $100,000 might not be.  When a tournament has a big guarantee, the “worst case” scenario is that there are lots of players and that the prize pool is fully funded by those players.  On the other hand, the best case scenario from the point of view of any individual player is that no other player turns up: they would thus receive the entire prize pool to themselves.  In reality, having zero opponents is probably unprecedented, and certainly incredibly unlikely.  The next best case scenario from the point of view of that same individual player is to have a very small player pool so that the poker operator has to tip in a whole lot of extra money which is divided between the players.  Clearly, this shows that when there’s an overlay, players in the tournament should be appreciative and celebrate the additional money that is being put into their pockets by the poker tournament operator – What can be better than free money in a poker tournament?  Each player who is able to take home a slice of the extra money has very clearly benefited from an overlay.

Characterizing overlays as failures is also mistakenly harmful to poker tournament operators, both online and live.  Poker operators who fund overlays should be seen as making a (sometimes accidental) contribution to the finances of poker players.  If a poker site is going to give big a chunk of money to its players, the least they should receive is some appreciation and gratitude for paying it to players.  In addition, rewarding poker operators with good coverage and thanks for their free money should also encourage poker operators to set ambitious guaranteed prize pools in the future, and increasing prize pools can only be good for players.  It can similarly encourage higher participation at future tournaments, which again benefits both operators and players.

Another harmful effect of lambasting poker operators that give out free money to players in the form of overlays is that it causes poker tournaments to measured mistakenly by artificially and arbitrarily set benchmarks – benchmarks that are set by internal financial and marketing teams. A $100 poker tournament that attracts 50 players with a guarantee of $5,000 is no more or less successful than a $100 poker tournament that attracts 50 players with a guarantee of $500 – in both cases, 50 players play, in both players, $5,000 is awarded to players.  Both tournaments are equally successful when measured but the parameters of player participation and prize pool size.  The idea that one of those two tournaments is more successful because it had a lower guarantee is nonsense.

Finally, judging poker tournaments relative to their guaranteed prize pool is a bad idea because that barometer is entirely set internally by the staff of poker operators for purposes of marketing and financial profitability by the operator. Such staff are typically incentivized to avoid creating overlays, and thus, can sometimes be inclined to set overly pessimistic targets. While a lower guarantee that avoids an overlay may please the internal bean counters, it doesn’t account for the lost players that might have played if the overlay was set more ambitiously.  Similarly, it can lead to a parade of false congratulatory celebration when poker tournaments vastly exceed their tournament guarantees. If poker operators set guarantees that are vastly exceeded by player participation, that’s not evidence of a popular tournament: that just proves that the people who set the guarantee were not very ambitious in their targets.

Instead, when it comes to evaluating the success of poker tournaments, the far more important metrics centre around customer satisfaction, the number of entrants, and the size of the prize pool. None of these metrics can be artificially gamed or fiddled by backroom bean counters or marketers, and, at least in the case of field size and prize pool size, are clearly transparent and on display, for everyone to see.  

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