Don’t bet on it: Understanding the risks of Baccarat side bets
Players love side bets, and so does the house. Both sides take the good with the bad: players love the excitement and the payoffs and are willing to accept infrequent wins; the house loves the house advantage but accepts volatility and the risk of advantage play. Bots have long targeted baccarat side bets online, and over the last five years rings of baccarat advantage players (AP) have become increasingly common across the globe.
In this first blog on baccarat advantage play, we rank popular baccarat side bets by monetary risk. To do this we developed computer-aided counts for 34 bets popular in Asia and evaluated each on a vanilla basis — that is, assuming one unit is wagered whenever the player has a positive expected value (EV see the definition below). In subsequent blogs we will show how sophisticated counters amplify profit through variable betting, and ultimately give an exposé on the risk of complex counting.
No pain no gain
The trifecta of low frequency, high payoff, and the fact that free hands are not unusual makes baccarat side-bet advantage players difficult to identify.
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EV or Expected value is the likely $ value of a bet based on the probability of an outcome. As the payoffs for a winning outcome is fixed by the game rules, the only dynamic in a game is the probability of a winning outcome. For any game dealt out of shoe the probability of a winning outcome will fluctuate based on the remaining composition of the shoe. Advantage players look for shoes with a high concentration cards which favor a winning outcome
Profit per shoe is a function of two things: how often the player has positive EV, and the average player advantage when EV is positive.
The typical baccarat side bet carries positive player EV roughly 4% of the time, which means an advantage player targeting a single bet will make a bet about 3.1 times per shoe — though on some bets this rises to 10 times per shoe. Across the side bets we reviewed, an advantage player who bets one unit every time she has an edge (i.e., wagers ~3 units per shoe) earns a profit of about 0.1 units per shoe; the strongest bets deliver about 0.2 units.
Chart one: frequency of positive player EV and avg player edge (when EV is player positive)
With the exception of Pair Plus and Monkey–No Monkey, most of the bets offered in Macau are low risk — low frequency and low player edge. We would like to see Macau operators take even more risk on Small/Big Tiger, Pairs, and Ties. We would recommend expanding maximum bets on Super Lucky Seven only in premium areas, where most patrons are lodgers with a longer length of stay.
While Monkey–No Monkey and Pair Plus are low-frequency risks, we are recommending that our Macau clients proceed with caution as these bets are easy to count (see our blog on count-ability). The riskiest bets have emerged in Manila, especially, but also in Singapore. We have found that Filipino players are motivated by high volatility bets, which fits the High Tie family of bets well. Operators have right-sized payout tables and continue to do so, but more rationalization is needed. For instance, with High Tie 0 paying 150-to-1, the player has positive EV about 12% of the time; if the AP bets on all 10 of those advantageous hands, she yields $0.18 for every $1 wagered. A leaky boat indeed. Rationalizing the payoff by 6% — from 150-to-1 to a still-compelling 140-to-1 — reduces the frequency of positive player EV by 40%.
Profit per shoe when flat betting
Profit per Shoe by Risk Category
Units per shoe. Click a game to plot it on its category's spectrum.
| Profit / shoe (units) | ||||
|---|---|---|---|---|
| Category▲ | Low▲ | High▲ | Range 00.501.001.50 |
Examples |
| High Risk | 0.77 | 1.72 | High Tie - 0High Tie - 2High Tie - 3High Tie - 8High Tie - 9Player Fabulous 4 | |
| Risky | 0.61 | 0.69 | High Tie - 1High Tie - 4High Tie - 7 | |
| Modest risk | 0.21 | 0.54 | Small TigerHigh Tie - 5High Tie - 6Small DragonDragon 74 Card TieSuper Lucky 7Banker Fabulous 4Banker 2 card 7* | |
| Low risk | 0.07 | 0.20 | Big TigerLucky Six / TigerTiger TieTiger PairBig DragonPanda 8Monkey No Monkey6 Card TiePair PlusBanker PairPlayer PairPlayer 3 card 7* | |
| NA risk | 0.00 | 0.04 | Lucky 75 Card TieBanker (base bet)Player (base bet)Tie_8Tie_9Banker 3 card 7*Banker no-commission* | |
Bars share a 0–1.72 scale; each bar spans that category's flat-bet range. A selected game plots as a marker at its own flat-bet profit. * in the per-game data but not named in the summary's examples.
Flat-betting returns, while directionally interesting, only tell the beginning of the story. A counting ring, or a network of bots armed with specialized computing, can amplify profit per shoe materially while capping downside risk by varying the size of wager relative EV.
In the next blog on our series on Baccarat advantage play we explore the impact of variable betting.
