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Why does the casino charge a commission on winning Banker bets at Baccarat?14 January 2013
By Alan Krigman
Answer: That's a good way to look at it. Player expects to win 446 and Banker 458 of every 1,000 rounds. The other 96 are ties.
Imagine $10 wagers on Player in each of 1,000 rounds. In theory, 446 wins pay the bettor $4,460 while 458 losses cost $4,580. The expected profit for the casino is $4,580 - $4,460 or $120, reflecting the statistical edge the house has on the bet.
Now picture $10 wagers on Banker in each of 1,000 rounds. In theory, 458 wins pay the bettor $4,580 while 446 losses cost $4,460. The casino therefore expects to lose $4,580 - $4,460 or $120. To regain an edge on this bet, the casino charges a commission -- normally 5 percent. The casino still pays out $4,580 but it collects $4,460 plus 5 percent of $4,580 or $229. With this, expected house profit is $4,460 + $229 - $4,580 or $109.
Theoretical expectations prove to be reliable when millions of comparably-sized bets are lumped together. For many fewer rounds, high random fluctuations can swamp the low-level average trends. So individual players may be way ahead or behind what's predicted based solely on the edge inherent in the game.