Don’t Bet on It - On Bots and Boffins: Baccarat side-bet advantage play
Bots and Boffins is a deep dive into an emerging risk in baccarat: advantage play on side bets. Side bets now account for 40% to 60% of baccarat revenue at many casinos, making them an increasingly attractive target. We have worked with online operators where bots reduced win rates by one-third on certain games. The risk is now becoming more prominent in bricks-and-mortar casinos, particularly in Asia. Technology is changing the economics of advantage play. Computer-aided counting coupled with AI allow players to identify opportunities more accurately and wager more efficiently, potentially tripling profits versus flat-betting alone. But AI is also part of the solution. Rather than deeper cut cards, restrictions and added friction, casinos can use AI to identify suspicious play proactively and at scale. This blog series is written from the casinos’ perspective and assumes an advantage player has access to computer enabled combinatorics to select bets.
“Don’t Bet on It” is our series on House Advantage and Return to Player (RTP). Previous blogs examined the impact of house advantage on GGR and the psychology of risk. Read them here.
“I just will never understand how some bacc players never play side bets…they are the life n blood of a solid game…”
One of the illuminating findings from the proliferation of smart tables is the true house advantage, i.e. of every dollar wagered, what percent was kept by the house. Operators had blithely assumed that the house advantage on baccarat was somewhere between 1.15% and 1.45%, but many operators at least privately questioned why the win rate from NNC / Rolling implied a win rate above 1.7%. Through smart table data, we can now see that house advantage in most markets and segments is above 2%, with some markets as high as 3%! Side bets are driving the expansion in win rates. Side bets account for roughly 5% of the wagered volume but 40% plus of revenues. In some markets, like the mass floor in Singapore and Manila, over 60% of revenues are from side bets.
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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
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All of our analysis is based on a 26 card cut penetration on an 8-deck shoe. See our payoffs and game rules
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The curious case of the vanishing vig
A few years ago, we were contacted by an online gaming operator that had inexplicably low win rates and couldn’t understand why. We dug into the results and ran them through a couple of different algorithms to identify unusual play behaviors. What we could see was that there was really unusual play behavior. For instance, a player might bet four times in a day: once at one A.M., twice at six A.M., and once at three P.M.
Who does that, right? Certainly, no real player. And in this case it wasn’t real players but bots using optimized wagers on any bet with positive EV. At the time, we thought this risk was a creature of online gaming.
Fast forward four years, and it seems like every month we’re hearing about a Baccarat advantage play ring at a land-based casino in one jurisdiction or another that has been identified, and the pace at which those rings are being identified is only quickening.
We thought we’d do a more comprehensive review from the perspective of the casino, trying to handicap the risks and rewards of side-bets. As you can see from our countability index, several popular bets – especially in Manila – are very countable but the real risk lies in computer aided advantage play covering multiple bets concurrently. And that’s not the worst part, advantage players can double their returns by varying her wager $ relative to the count. We are familiar with an online operator where advantage playing bots are reducing overall win rate by -15%. In Macau we often see advantage players reducing ETG win rate by -5% plus. Considering side bets are 40% of revenues, pundits estimate that advantage play leakage at $500m to $700m across Asia at bricks and mortar and online properties.
Addressing this leakage is your easiest route to achieving next year’s budget.
Riskiest Baccarat bets in Asia
We started out by setting a baseline for all the most popular side-bets in Asia; 34 bets in total. We asked ourselves: what is the baseline risk per shoe from an Advantage Player (AP) backed by computer perfect combinatorial count.
In order to estimate profit per shoe, we assumed the AP bet every-time the bet has a positive EV and then evaluated the avg edge when EV is positive. We tested on 800m shoes with a 26 card penetration.
In terms of profit per shoe risk:
High-tie family of bets are the riskiest bets with some of high-tie bets frequently being advantageous to the player and when they are they can be meaningful.
Other notably risky bets include the player outcome Fab 4 from Singapore and online. Fab 4 was central to the counting team prosecuted in 2023.
Modest risk bets popular in Macau like Small Tiger and Super Lucky Seven.
New Macau entrants Monkey / No Monkey and Pair Plus are not major risks in terms profit per shoe due to infrequent positive EV frequency (see chart at right), but these bets are risky for other reasons, as we explore in our next blog on Advantage Play and Optimal Wagering.
Read more on about advantage play risk and see a list of the riskiest best here
Chart one: frequency of positive player EV and avg player edge (when EV is player positive)
Amplifying advantages
Investors and advantage players alike recognize that profit stems not only from the ability to identify opportunities, but from how deeply one bets her convictions. We utilized the Hex Casino LLM to direct an analytical technique called reinforcement learning to find a wager strategy (i.e. how to scale the value of a bet) in order to optimize profit while minimizing the risk of ruin. And to be fair, Hex could not risk more than a flat bettor. Given these constraints, Hex designed an optimal betting strategy for each of the 34 bets we are analyzing.
Overall, Hex was able to drive 60% more incremental profit from the same dollar risked. But the results were uneven: in general, for bets where positive player EV scenarios are relatively rare, the lift from optimal betting was often a 90% incremental lift.
Our use of AI is tailoring variable wager $ strategies to individual games.
Chart two: profit per shoe for flat wagering and optimal wagering (top five)
Not every countable bet is a threat, but every threat is countable. We ranked baccarat side bets by countability: how reliably a computer-aided combinatorics count informs an advantage player she has an edge. All of the following is based on combinatorics counts. We evaluated counting systems along two dimensions: does the system provide accurate insights.
Countable and consistent: High Tie 0/3/9/8, Dragon Seven, and Four Card Tie. Easy to count, and they deliverable profitable shoes consistently. This is where surveillance should spend its attention.
Countable but volatile. Monkey / No Monkey is the easiest major game to count an AP can improve her chances by +46% over random selection, and simple enough to run in your head. No computer required. But volatility blunts the edge, making it less of an obvious risk than precision suggests. Tiger Tie ranks as countable as well.
Juice is nominally worth the squeeze. Most bets lie in this group: either challenging to count or too volatile to deliver consistently positive shoes. Notably includes Lucky Six, Pair Plus, Small Tiger, and Super Lucky Seven
Difficult to get a durable edge. Notably includes Big/Small Tiger which accounts for ~20% of revenue in Macau also obviously low risk bets like Banker/Player and Pairs.
Most alarmingly, just because a bet is difficult to count, and as a standalone bet, is not lucrative, does not mean the bet is low risk. When merged with other bets, even a seemingly low risk bet becomes a integral part of lucrative counting scheme.
Read more about our evaluation of the countability of different baccarat side-bets
Chart three: Given the counting strategy, frequency one shoe will be profitable and the profit per shoe (assumed optimal wagering)
Counting on countability
CTRL + ALT + P: How Portfolio counting changes Side-Bet risk profile
Why would an advantage player limit herself to a single wager? An AP counting one bet in Macau finds a positive EV situation one to three times a shoe. Counting all the bets, she will find roughly seven. The arithmetic follows from there. Flat-betting Super Lucky Seven returns 0.27 units per shoe on seven units wagered. The same seven units, allocated across all the bets (what we call portfolio counting), return 1.04. An AP using portfolio counting, her odds of leaving a shoe with a profit move from roughly 8% to nearly one in three.
The population doing this has grown since 2021. Asian teams operate with floor monitors, bankroll leaders, and offsite coordination. AI-powered apps are sold openly online. Electronic table games are the softest target, because one AP can watch several games at once and the vendors haven’t made bet level data accessible.
Detection is the harder problem. Portfolio counting is camouflage counting. The signals contradict one another, and a player who appears to bet without pattern does not trip a review. One client site lost double digits of revenue before anyone named the cause. Online, side-bet GGR runs near half of brick-and-mortar, and volume rebates and shoe-end caps hide the rest.
An advantage player using optimal betting / money management plus portfolio betting can 3x her profit.
Chart four: Units per shoe profit on 7 units wagered under different counting approaches
Our series on side bet advantage play
Ranking bets by risk https://www.diffgaming.com/blog/dont-bet-on-it-ranking-baccarat-side-bet-risk
Optimal wagering and money management https://www.diffgaming.com/blog/dont-bet-how-advantage-players-optimize-profit-by-optimizing-wager-
Most effective counting systems https://www.diffgaming.com/blog/dont-bet-on-it-ranking-counting-systems
Impact of portfolio counting https://www.diffgaming.com/blog/dont-bet-on-it-the-hidden-risk-from-portfolio-counting
Appendix one: our game rules and payoff https://www.diffgaming.com/sidebet_games
Appendix two: reconciliation between our work and others https://www.diffgaming.com/sidebet_comp