What is Overlay in Fantasy Football?
Overlay is a common fantasy term used when referring to a paid fantasy football league in which the money raised by the league's site through cost of entry fees is not as high as the amount of money guaranteed to any prize winners. This difference in monetary amounts is then added to the prize pool by the site itself, giving more people a higher chance at winning money since there are less participants.
How Overlay Works
In a league with overlay, the hosting site has to cover the costs of the excess number of participants that were expected to play in the league but did not. So if a league was expecting 500 participants but only got 400, and entry costs were $50, the site would have to put in the excess $5,000 (100 players x $50). The site must do this to fulfill the prize guarantees made to participants before joining.
Why Does Overlay Occur?
With so much money to be made through Fantasy Football leagues, there are so many sites dedicated to providing fans leagues to participate in. This can create markets in which the supply is too high for the demand, causing leagues to be left unfilled and less money than expected to be poured into them. If a certain site expects a league to be filled with 500 participants, but only 300 join, they cannot simply disband that league and force those people to go to another. They have to honor the prizes that they promised at the beginning, even if it means the site has to put in thousands of dollars on their own.
How Overlay Can Help You Win More Money
Since many sites will give prizes to the top percentage of finishers in a league, typically the top 20%, having fewer participants in a league with overlay can increase your chances of winning by a significant percentage. With a higher chance of winning and less competition to have to defeat, an average player should always look for leagues with overlay for easier earnings.