Earlier this year, The New York Times published the obituary of John Fairfax of Henderson, a lifelong adventurer and gambling enthusiast who favored baccarat.
“Baccarat is equal parts skill and chance,” the Times obit stated. But it was wrong. Baccarat is 100 percent luck, zero percent skill. By all accounts, John Fairfax lived a rewarding and fascinating life, but he was not playing baccarat with a mathematical advantage against the house. No one does.
Even so, the casinos’ edge in the game is small enough—and many of the wagers large enough—that baccarat revenues can fluctuate violently compared with other games, often plummeting one month and soaring the next.
For a card game that generates a sizeable chunk of Nevada’s table-gaming revenue, baccarat is a rather elementary pastime (see the rules below). It offers no opportunity to use logic or creative thinking, as poker does. It offers none of the intellectual stimulation of noncasino card games like bridge or hearts. It offers no chance to win a veritable fortune on a single modest bet, as you might with horse racing’s Pick Six.
The only decision in baccarat is choosing to bet whether the “player” or the “banker” will end up with a better hand. And even those terms have no real meaning. They might as well be called “red” and “blue” or “heads” and “tails.”
That’s it. The hand plays out according to a predetermined set of rules, and you can expect to lose a little more than $1 for every $100 you put into action (assuming you avoid the “tie,” which caters to masochists with its huge house advantage).
Belying the game’s simplistic nature, however, baccarat results play a major role in shaping the bottom line of Nevada’s big casino companies. In 2011, for example, the state’s casinos won $1.26 billion from baccarat players, while only netting $1.04 billion from blackjack players and less than $400 million from both craps and roulette players. Consider that baccarat is available at about 259 tables in 25 casinos, compared with blackjack’s 2,801 tables in 151 casinos, and its revenue numbers are even more noteworthy. No other table game even comes close.
In popular culture, baccarat historically has conjured images of James Bond in Nassau or well-heeled gamblers frolicking in Havana on the eve of Fulgencio Batista’s ouster. In fact, an early scene in 1962’s Dr. No, the first Bond film, shows 007 matching wits with Sylvia Trench across the green baize (although technically they’re playing Chemin de Fer, a variation of baccarat).
In Western society, baccarat’s reputation as a glamorous endeavor has largely faded. Modern-day baccarat play is driven primarily by gamblers from China and other Asian countries, where the game’s essence is deeply rooted in the culture.
“The Asians love the characteristics of the game,” says Bill Zender, a former gaming executive who served as vice president, director of casino operations and part-owner of the Aladdin hotel-casino. “To them it’s a pure gambling game. Once the cards have been shuffled, cut and placed into the shoe, the cards speak for themselves.”
Asian gambling tradition dictates that the fate of the players at a baccarat table is sealed in a freshly shuffled shoe. “Any mistake made by the dealer that is not handled with the correct procedure and changes the order of the cards could chase them from the table,” Zender says. “Asians have a strong belief in fate.”
In a conference call for investors last year, Jim Murren, chairman and CEO of MGM Resorts International, said high-rolling casino customers from the U.S. prefer games other than baccarat.
“Most of our baccarat business is international,” Murren said. “There’s very little national [domestic] baccarat play.”
Non-Asian tourists would rather play a game that gives them an opportunity to make decisions on their hand.
“In years past, the only reason baccarat attracted some of the non-Asian customers was due to the tradition related to big-table baccarat,” Zender says. “Dealers in tuxedos, beautiful women acting as shills, the use of cash or gaming plaques. These traditions have gone by the wayside with the advent of Asian play. Asians are where the real money is.”
A relatively small number of high-rolling gamblers drive the baccarat action in Las Vegas. As a result, even though the house maintains an edge in the long run, short-term results can be a wild ride. February 2010, for instance, was a great month for baccarat. The state’s casinos won more than $206 million from baccarat players that month—thanks in part to Chinese New Year celebrations—keeping 17 percent of the total amount of money wagered on the game. In June of that year, by contrast, the casinos won just $18.5 million from baccarat players, keeping only 3.5 percent of the money wagered.
Long-term, casinos aim to hold about 12 percent of the money gamblers risk at baccarat. Other games, which rely on a larger pool of players making much smaller bets, have more consistent hold rates from month to month and quarter to quarter. That’s why casino executives often refer to “Lady Luck” or “the luck of the draw” when addressing short-term baccarat results.
As Zender puts it, “How baccarat does, so does the Strip, and how the Strip does, so does the county and state.”
Rules of The Game
Traditional baccarat (bah-kur-RAH), or “big-table” baccarat, is played at a table that seats up to 12 or 14 players. It is often found in casino high-limit rooms.
A shoe containing eight decks of cards rotates around the table, giving each player an opportunity to act as dealer.
Aces are valued at 1 point, deuces through 9s at pip value (the number on the card) and face cards at zero points.
Players place bets on either the “player,” the “banker” or the “tie.”
The person designated as the dealer distributes two cards to himself for the “banker” hand and two cards to the person designated the “player,” usually the individual who has bet the most money on the “player” side. A hand’s score is the right digit of the sum of the two cards. The left digit is canceled. So, a 5 and a 6 is scored as a 1. A pair of 5s is scored as a zero, and so on. The score will always range from zero to 9, with 9 the highest possible score. Suits are irrelevant.
After the initial deal, the player or the banker stands when dealt a hand with a score of 8 or 9 (a “natural”). The player also stands if he is dealt a 6 or 7. Otherwise, the player draws a third card.
When the player does not have a natural, the banker hits on totals of zero to 2. If the player stands, the banker hits on 5 or less. If the player hits, the banker acts according to rules that determine whether he hits or stands.
The hand with a higher score wins. Bets on player pay even money. Bets on banker pay 19 to 20, or .95 to 1. The tie pays 8 to 1. Bets on banker and player push in the event of a tie.
Most baccarat play in Las Vegas is at high-end Strip casinos. In smaller casinos, mini baccarat is usually offered instead, with the house dealer handling all the cards and allowing the game to move faster. Otherwise, the rules are the same.