Understanding Commissions in Baccarat: How They Affect Your Returns

Baccarat is a game the is often associated with high rollers. Casinos, both online and landbased, often offer high stakes Baccarat tables. There, you can take your bets up to thousands of dollars, if not more. Players use all kinds of strategies and betting tactics, and the game’s fast paced nature makes it an attractive source of entertainment

There are numerous types of baccarat, including many Zero Commission Baccarat titles, in which the house does not place a 5% commission on your wins. While it entices gamers for having no apparent house edge – we will analyze exactly how the commission and probability works in baccarat. By knowing the game inside out and how these games are designed, you will have a better understanding of how to turn a profit on this glamorous card game.

Quick Recap How Baccarat Works

Let’s have a brief recap of the rules of baccarat and how it works. Scoring as high as possible is the principle of the game, and the dealer draws 2 cards for both the player and the banker. If the value of the cards go into double digits, simply subtract 10, and the hand with the highest value wins. Cards are taken at face value, except for 10 J, Q and K which count as 0 points, and the A which counts as 1 point. There is a third card rule, which can see the dealer drawing a third card for the player or the player and the banker.

You have to place bets on whether the player will win, the banker will win, or whether the game will end in a tie. Generally, conventional baccarat pays out the following:

• Banker – 1:1 (minus 5% Commission)
• Player – 1:1
• Tie – 8:1

The third card rule gives the banker a small edge. This is why casinos put a 5% commission on banker bets to ensure that they keep a house edge.

• Banker Bet – 1.06% (with commission)
• Player Bet – 1.24%
• Tie Bet – 14.36% (at 8:1 odds)

Even with a commission, the house edge is still smaller on banker bets than on the player bets. The ties have a much higher house edge if the odds are 8:1. Baccarat with 9:1 odds on ties drops down to approximately 4.8%.

How the Third Card Rules Change the Probabilities

The third card rule adds that additional complexity to baccarat and makes the game come alive. It may take a few rounds to understand how it works, but the principle is quite simple. Players draw a third card if the total value is 5 or under. This can give them the edge they need to win, but it can also send the player’s value over 10, which can see them losing.

The banker’s third card rules are a lot more complex. At a value of 0-5, banker draws, and if their total is 6 or 7, they stand. This is, unless the player had to draw a third card.

• Banker’s Total is 2 or Lower –  Banker Always Draws
• Player Did not Draw 8 – Banker Draws on 3
• Player Drew 0, 1, 8, 9 – Banker Draws on 4
• Player Drew 0, 1, 2, 3, 8, 9 – Banker Draws on 5
• Player Drew 0, 1, 2, 3, 4, 5, 8, 9 – Banker Draws on 6
• Banker’s Total is 7 or Higher – Banker Never Draws

The third card rule is specially designed to give the banker a small edge. They will win the majority of times, the probability comes out to the following approximation:

• Banker Bet: 45.843% Chance of Winning
• Player Bet: 44.615% Chance of Winning
• Tie: 9.543% Chance of Winning

With the 5% commission, the casino takes its cut from any banker bet winnings, ensuring that it will remain in profit over the course of thousands of bets. You will need to win slightly more banker bets than the real probability in order to turn a profit.

How Zero Commission Baccarat Works

So if you simply take out commission from the equation, then theoretically you would be a winner. Right? Unfortunately, no. In zero-commission baccarat, the paytables are often slightly changed so that the casino can retain its edge.

If the Player has an initial total of 6 or 7, the Player does not draw a third card.

• The Banker will draw a third card depending on the Player’s hand:
  • If the Player did not draw a card, the Banker draws if he has 0-5.
  • If the Player drew a 2 or 3, the Banker draws if he has 0-4.
  • If the Player drew a 4 or 5, the Banker draws if he has 0-5.
  • If the Player drew a 6 or 7, the Banker draws if he has 0-6.
  • If the Player drew an 8, the Banker draws if he has 0-2.
  • If the Player drew an Ace, 9, 10, or face card, the Banker draws if he has 0-3.

The game is played with 8 decks of cards. Cards are shuffled at the start of each game.

Paytable:

• “Player” Win: 1:1
• “Banker” Win: 1:1
• “Tie” Win: 9:1 **
• For a specific winning Banker bet where the Banker is holding 3 cards with a score of 7, bets on Banker are pushed (i.e., Banker bets are returned).
• If hands have the same value, bets on “Banker” or “Player” are tied, and those bets are returned.

This is done with the introduction of specific rules. There are numerous conditions, such as if the Banker wins on a 7 (when the player has drawn a third card), the bet is pushed. Or, more commonly, the banker pays out less on a win of 6. In the second instance, Banker wins on 6 payout at 1:2. This seems arbitrary at first, but let’s see how the scenario works.

The player has to stand on a 6 or a 7, but if they have a total of 5 or under, they must draw. If the player draws a third card, the banker needs to draw, unless their score and the player’s third card do not meet the conditions above. Ultimately, the banker has an approximately 5.39% chance of winning with a 6, in a standard 8-deck game of baccarat.

While it is a rare occurrence, this small deviation is enough to give the house an edge. There are other types of variants of no commission baccarat. Bear in mind, that if the penalty is not applied on the Banker winning on 6, it may be applied in other scenarios. The goal is to still retain a slight edge so that the house can make a profit in the long run.

Traditional Baccarat or No Commission

In the Zero Commission Baccarat case above (Banker Win on 6 Pays 1:2), the house edge is higher than conventional baccarat. The house edge jumps up to 1:46% on a banker bet, whereas in traditional baccarat, it is only 1.06%. The answer is a lot more complicated than just presenting percentages and probabilities.

How RTP Comes Into Play

This is because these percentages, and all RTP values, are hypotheticals. Playing thousands of rounds, there is a higher chance that your winnings will reflect this edge. Over those rounds, all anomalies are “normalized”. Like the player winning 10 times in a row, or 5 consecutive ties, is more or less ruled out. But when you only play 50 games, then the house edge is more of a theoretical number than a guideline. In 50 games, chances are, you will either get 2 or 3 Banker Wins on 6 scenarios (going by the 5.39% chance of happening). If the 50 rounds goes by without a Banker WIns on 6, and you win 26 rounds, without paying out the 5% commission, you will be in the green.

Tips for Baccarat Newcomers

Ultimately, it all boils down to your preferences and which game you find more entertaining. For beginners, we recommend starting with conventional baccarat, and using a demo version if there is one available. Play for virtual money and try out each of the three standard bets (along with any side bets that you like the look of). When you are more familiar with the rules and patterns of the game, then you can try playing for real money. And remember, these games are intended for entertainment purposes.

You should never gamble with more money than you can afford to lose. So set limits for your spending and reality checks to ensure you don’t get carried away – and have fun playing baccarat.