A satellite tournament is where the prize pool is combined to offer an entry into a larger tournament. Most people do not have the abililty to cough up $10,000 to play in the World Series of Poker. The vasy majority of the players there have won a satellite of some sort. If 100 people all pay $500+$50 to enter a tournament, then the total prize pool is $50,000. Since the cost of a seat in the Main Event of the world Series of Poker costs $10,000, then five of the 100 players would be awarded an entry into that tournament. Note that there are no differences in the prizes between first and fifth place. All players receive the same prize. Leftover money in the prize pool is usually awarded as a single cash prize.

If 105 people had entered the tournament in our example, then the total prize pool is now $52500 ($500x105). There would still be five entries awarded into the World Series of Poker, but sixth place would now receive $2500. Everybody else goes home empty-handed. Another common way to divide up extra cash is to award the entry fee that the person paid into the tournament for as many places as can be done. In our example with 105 players, then the top 5 would be awarded the WSOP seat, while places 6-10 would all receive their $500 entry fee back.