In poker games, a player may, at times, decide to go all-in in a round. If the player has lesser chips as compared to other players, the other players might be in a position to call the all-in bet as well as raise it. Thus, while the player has gone all-in, others might continue betting and the excess amount is placed in a side pot that governs the side game.
It is extremely important for there to be at least more than two players involved to allow for a side game to develop.
For e.g. player A decides to go all in with her/his opening bet and bets $50 into the pot. Player B decides that s/he would like to take the pot higher and thus calls A’s bet with $50 and raises it by another $30. Now, while the betting amount has reached $80, $50 out of the $80 are for A’s all-in bet while the remaining $30 are extra and are placed in a side pot. Player C decides to call B’s bet and puts her/his $80 into the pot. Like B’s bet, C’s bet is also divided into $50 that goes into the main pot and $30 that goes into the side pot. So while the main pot has $150 + the blinds, the side pot has $60 in it from B’s and C’s excess betting amount.
When the winner is decided, A can only compete for the amount in the main pot as s/he does not have any contribution to the side pot. However, B and C compete for the main as well as the side pot amount and upon winning, they will take the entire pot, i.e. main + side pot value. However, if A wins the pot, then s/he will only be entitled to the main pot and the side pot is evenly split between B and C.