Casino Enterprise Management

Betting the “Ties”
Do you know what the house’s advantage is on any wager placed on the “tie” bet? No? Well, you should know what it is, because it may change your mind on the tie wager and its importance in baccarat. Baccarat games where the casino pays a winning tie bet at the rate of 8-to-1 maintains a house advantage of 14.4 percent on every dollar wagered. That means that for every $10 wagered on the tie, the casino expects to win, in theory, $1.44. When comparing bet value to the casino, a $10 tie wager will win more money than a $100 wager on the banker ($1.07) or a $100 wager on the player ($1.23). Knowing this information, wouldn’t a smart casino operator look for ways to increase “tie” wagering?

The cost of not offering tie wagers
Do you know that a number of casinos in North America have taken the tie wagering area completely off the table layout? That’s right; they no longer have a place on the table specifically for customers to make a spontaneous wager on the tie. Usually, however, they still allow tie wagering. The customer has to ask the dealer for a “tie” lamer button to place on top of the wager. How much has that cost the casino? Table 1 examines the cost of not offering the tie bet (or discouraging it) if the customer had a desire to bet the tie after a tie hand.

If baccarat customers were to wager on the tie bet immediately after a tie between the player and banker hands, the casino would theoretically win $175 per day per table. As you can see, the casino that fails to offer the tie wager stands to lose $63,870 per table annually.

Promoting tie wagers
Based upon the 14 percent house advantage, and the fact that the tie wager is not subject to participation fees like other live game side bets, management should see the importance of a tie wager promotion strategy in an attempt to create more tie bet action. This strategy needs to be centered on the dealer and how the dealer vocally promotes the tie bet option to customers at the table.

For example, a more common method of promoting wagering on tie bets is after the previous hand has resulted in a tie. The dealer can then proclaim, “Last hand resulted in a tie … ties do repeat … get your tie bets down before the next hand begins.” Other acceptable tie promotions occur at the beginning of a new shoe. At this point the dealer can advise the players that they can wager on the tie, and when the hands tie, the winning bet pays 8-to-1.

Collecting Commission on Winning Banker Hands
Without charging commission on winning banker hands, baccarat would not provide the casino with a profit; all the customers would be wagering on the banker side. This mono-directional wagering would be due to the fact that the banker wager (45.9 percent) wins more often than the player wager (44.6 percent). By charging a 5 percent commission on all winning banker wagers, the casino realizes a theoretical advantage of 1.06 percent. Any reduction in the percentage charged will have a serious effect on the banker wager house advantage and the overall revenue earned by the casino. Table 2 provides a list of banker advantages based on commission charged on winning banker bets.

In the past, casino marketing has used a decrease in banker commission as a marketing tool. Both Binion’s Horseshoe and the old Castaways Hotel & Casino used a 4 percent commission to attract players, with both recognizing limited success. There is an inherent problem that casinos experience when they reduce the rate of commission. The reduction negatively affects revenue from all baccarat players, not just the few newer customers that the promotion attracts.

Marking commission vs. collecting commission when the banker bet wins
Traditionally, all commissions charged to the customer were marked up by the dealer on the table in an area of the layout specifically set up to handle this accounting transaction. Once the banker hand wins and a winning wager paid, the dealer records the amount of the commission in a numbered box corresponding to the customer’s position at the table. This procedure is done as a courtesy to the player, and he or she is only required to pay the commission at the conclusion of that play’s shoe, or when the amount of marked commission is equal to an average wager by that player (an amount established at management’s discretion).

One drawback from marking commission is the marking process itself, as well as the payment process. Most executives familiar with baccarat will tell you the courtesy procedure of marking commission also saves time since the total commission for the player during that shoe is paid at one time. This is not true. The cost in time to mark the commission and the additional time penalty during the payment period exceeds the time spent settling the amount during the payment of winning banker wagers.

Another drawback to marking up commission is that you may not be able to collect this debt if the player runs out of money while wagering during the shoe. In many situations, floor supervisors and pit managers have taken the uncollected commission total down instead of placing the obligation to pay on a customer whose degree of “embarrassment” might cause them to steer away from that casino in the future. Many higher-limit players know that casinos are willing to absorb banker commission amounts if the player loses, and promptly ask for that option when losing at the end of the shoe during commission settlement. One method used to dilute the cost of this “privileged” situation is to transfer the amount of unpaid commission to a player’s account in the casino cage. This amount can be held against comp dollars earned or against discounts on markers, or any other reward incentive the casino offers for time played on the tables.

Another method for collecting is to take the commission during the payoff. This can be handled by asking the customer to take the amount of commission from the chips the customer has in front of him at the table, or to have the dealer collect the commission from the amount paid for the winning banker wager. This is operationally preferable since taking the commission up front is quicker than the mark-up procedure, and the casino is not left holding the bag if the customer goes broke during the shoe.

Pre-paid commission
There also remains a third method for collecting banker commission. This option is known as pre-paid commission. When the customer places a wager on the banker, he or she must place the necessary commission on top of the bet. If the wager loses, the entire wager plus the pre-paid commission is taken by the dealer; however, if the wager is a winner, only the original wager (sans the pre-paid commission) is paid. Although much quicker, the dealer will be forced to make more chip change transactions during the course of play to provide the customers with enough smaller-denomination chips to use for the pre-paid commission. One drawback to using the pre-paid commission procedure: The casino wins slightly less money. By viewing Table 3, it is noted that the banker hand wins more times than it loses. Since the commission is now taken when the hand loses, the expected return diminishes by 6 cents for every $100 wagered, and reduces the banker wager house advantage from 1.06 percent to 1.00 percent.

Baccarat Dealing and Game Protection
Cover the discard holder
In the game of mini-baccarat the cards are never touched by the players, so why should management worry about them marking the cards? Believe it or not, cheaters have been known to reach into the discard holder when the dealer’s attention is elsewhere and mark 7s, 8s and 9s when they are placed on top of the discard stack. How do the players know one of those specific cards is positioned on the top of the discards? Because the previously played cards that lie on the layout in front of the dealer are picked up in a specific order. The card that lies to the farthest right of the dealer will always be the top card in the discard holder after the the dealer scoops up the cards. During the dealer’s pay/take procedure after the hand is decided, the cheater, seated in the last table position, will surreptitiously reach into the discard holder and mark the target card with a colored daub.

Sounds like something out of an Ocean’s Eleven movie? Hardly. This cheating move has occurred so frequently over the last decade that gaming suppliers sell a plastic device to cover the discard holder. If your intention as a casino executive is to adequately protect your mini-baccarat game from cheaters, consider purchasing these covers for your mini-baccarat games.

Use the Harrigan brush faceplate
Personally, I recommend using the Harrigan “brush” faceplate shield. The two other options—the curtain and the plastic slide—accomplish the job of protecting the face of the shoe but have severe drawbacks. The curtain works well as long as it’s not worn or dirty. Once it becomes worn or dirty, the curtain fails to cover the entire face of the shoe, usually exposing the lip and lower portion on the shoe’s window. Protecting the face of the shoe with the plastic slide presents two problems. First, the dealer must move the slide up and out of the way to get his fingers onto the top card for delivery. This procedure will require an extra moment of time during each card delivery and slows down the game. Second, the slide makes a “clacking” noise when it’s operated. Sometimes this noise can become quite irritating. The Harrigan faceplate provides adequate cover with minimal loss in dealing speed and no additional noise. Be careful to install the faceplate correctly. If the brushes don’t cover the entire window and top card of the shoe, the device is worthless. Just imagine that the cards are to be dealt from the shoe exposed, face up. If the brush faceplate doesn’t allow the cards to be seen (even slightly), then the faceplate has been installed properly. The use of a shield over the window and face of the shoe prevents all forms of marked cards from being used by the cheaters.

Consider using a batch shuffling machine
As mentioned in Part I of this article (July 2008), batch shuffling machines are usually accepted by the customers as a valid procedure for card shuffling. The batch shuffling machine presents the casino executive with two advantages. First, the shuffling machine speeds the game along by reducing time lost to manual card shuffling. Second, if the procedure for using a batch shuffling machine is strictly adhered to, fear of losses due to a false shuffling scam is eliminated. The machines eliminate the need for the dealer to shuffle the cards, and the dual shuffling compartments of the batch shuffler makes discovery of any non-shuffled cards easy to detect upon review of the video or digital recording.

Not Taking Commission on Banker Hand Wins
­­Whether you opt to mark up the winning banker wager commission or collect it at the time of banker wager payoffs, the process still costs the casino revenue in time spent conducting the commission function. Wouldn’t it be more advantageous if the casino could forego collection entirely? Unfortunately, failing to collect commission on winning banker hands would render the game unprofitable—but very popular with players.

There are some alternative game rules for baccarat that don’t require commission to be collected on winning banker hands and still provide the casino with a reasonable edge on banker wagers. In each of these options the banker hand receives a reduced payoff, or push, from specific winning hand totals and/or card combinations. The reduction in winning payoff on these rules offsets the casino’s loss from the elimination of commission. In some situations the casino’s house advantage on the banker hand increases, while in others it remains close to the same or suffers a noticeable decrease. These options are as follows:

Punto Banco (translation: Player Banker) In one version of this generally European form of baccarat, the banker hand wins half the bet with a winning total of 6. Based on this rule modification, the house advantage on the banker hand changes to 1.46 percent, or approximately 0.4 percent higher than charging 5 percent. In a second version of this game, all winning banker wagers are paid 19 for 20 chips, or 5 percent less than the original wager. Functionally this version is the same as a 5 percent commission game.

A version of Punto Banco played in Venezuela The banker wins half the bet with a winning total of 5. Because the chance of the banker hand winning with a 5 is less than the chance of this wager winning with a 6, the house advantage is less. The house advantage on the banker hand decreases to 0.93 percent, which is a decrease from the 5 percent commission game by approximately 0.13 percent.

EZ Baccarat The banker hand “pushes” on a winning three-card total of 7 (the player wager still loses). The house advantage on the banker hand is 1.02 percent. [Note: EZ Baccarat is considered the intellectual property of Dragonslayer Limited, but is available through a lease agreement.]

Bill Zender is a former Nevada Gaming Control agent, casino operator, professional card counter and present gaming consultant. He has been involved in various areas of gaming and hospitality since 1976.  He can be reached at wzender@lastresortconsulting.com.