How do the casinos make money on Baccarat?

Robert asked:
So, either the player wins, or the banker, and none of them lose money when a tie shows up. The odds of a banker and player showing up is almost equal, except the small 5% commission on banker. So, my question is that how is this game profitable for the casino? Basically, it seems to me that they are only profiting on the tie, and the 5% commission, because based on equal odds of player and banker, half of the players should win, and half should lose their bets in the long run [let’s say in a sample of 1 million bets per year]. Someone clear things up for me please, because I think the 5% commission would never satiate the casino owners who are seeking to make big money out of these games.

Answer

Baccarat is a game of chance that is popular among casino players worldwide. The game has a low house edge, which means that players have a better chance of winning than in many other casino games. However, casinos still make money on Baccarat through a combination of factors, including the 5% commission on banker bets, the odds of winning for each hand, and the overall volume of bets placed.

The 5% commission on banker bets is a significant source of revenue for casinos. This commission is taken from the winnings of bets placed on the banker, which has a slightly higher chance of winning each hand than the player. Over time, the commission collected from banker bets adds up and can be a substantial source of revenue for the casino.

In addition to the commission on banker bets, casinos also make money on Baccarat through the overall volume of bets placed. While the odds of winning are close to 50/50 for each hand, players can place multiple bets in each round of play. This means that even if half of the players win their bets, the casino can still make a profit if the total amount of money wagered is high enough.

Finally, while ties in Baccarat are relatively rare, they do occur, and the casino makes a profit when a tie occurs. This is because the payout for a tie bet is significantly higher than for a win by the player or banker. However, ties represent a small percentage of total hands played, and the casino’s overall profit is mostly generated from the commission on banker bets and the volume of bets placed.

In conclusion, while the odds of winning in Baccarat are relatively close for both the player and the banker, casinos still make money through the 5% commission on banker bets, the volume of bets placed, and the occasional tie bet. While it may seem like the casino is barely profiting due to the close odds of the game, the combination of these factors ensures that the casino always comes out on top in the long run.