Observed house edge in baccarat?
Does anyone have any further knowledge around observed house edge in baccarat (proportion of Banker, Player, Tie bets)?
The table hold may vary month-by-month (that is, the % of table drop kept as profit), but as a very rough rule of thumb is a 10:1 ratio: so, a long-term table hold figure of 25% corresponds to a game having about a 2.5% house edge (typical of Pai Gow poker), and a 14% table hold (typical of Baccarat with a little side bet action) corresponds to about 1.4% table hold, within limits. Higher holds may indicate a lot of side bet action.
I'm slightly confused by your use of the word "hold". In the long-term, won't hold converge to house edge? Ex. A roulette table's hold will converge to 5.26% over time even though monthly/daily/weekly variations will obviously be higher/lower?
I'm not quite sure what you mean by 10:1? Do you mean that I should take the highest house edge proposition bet and divide by 10 to obtain the over hold (I certainly wouldn't think this is the case)?
The observed house edge is a weighted average between all the bets people tend to make. There are no playing mistakes in baccarat (except betting the tie...), so they can use a constant estimate based on betting patterns.
Without watching the table carefully and recording all the betting action, there is no way to actually calculate this from the hold.
In games like craps and baccarat, the house edge on the game in entirety is a proportion of the dollars bet on each bet type. My question was if anyone had observed hold that was consistent with the 2.85%.
Quote: JonDoughSo you're saying that hold on a roulette table doesn't converge to 5.26% over time?
"hold" measures something else. If you walk in with a Grand and walk out with $200, the Casino 'held' 80% of your money. I believe I have that right. Over time it is averaged for a player.
Quote: odiousgambit"hold" measures something else. If you walk in with a Grand and walk out with $200, the Casino 'held' 80% of your money. I believe I have that right. Over time it is averaged for a player.
Yes this is correct, and a subtle distinction that took me a while to understand.
The House Edge applies to EACH BET PLACED. Say you walked up to a US roulette table and bought in for $100. If you place a bet for $10, your expected loss on that bet, according to the house edge, would be $0.52. Now if you sit there and place 100 $10 bets, then your expected loss for the session would be 100 * $0.52 or $52.06. That would be the "theoretical hold" for the casino, $52.06 of your original $100 or 52.06% (of course over 100 bets, who knows what the actual hold would be). So "hold" takes into account house edge, size of buy-ins, size and frequency of bets, etc. I would guess casinos use all of those variables to estimate what their hold should be for each table on each given shift.
The shorter the time period, the more this % will vary. However, on a game like Baccarat or Craps, theoretical casino edge (long-term hold %) is entirely dependent on the proportion of dollars wagered on each bet type. My question was if anyone had evidence to suggest it was around 2.85% for baccarat?
Quote: JonDoughHold = Amount casino keeps / Total amount bet.
No, this is incorrect. Hold = Amount casino keeps / Total value of chips purchased. If someone buys $1000 in chips, then goes directly to the cashier to cash them out, the hold for this person would be 0%; this will skew the observed hold, and the person didn't even wager anything.
Quote:The shorter the time period, the more this % will vary. However, on a game like Baccarat or Craps, theoretical casino edge (long-term hold %) is entirely dependent on the proportion of dollars wagered on each bet type. My question was if anyone had evidence to suggest it was around 2.85% for baccarat?
I think we've been distracted from your original question.
Yes, the actual house edge depends on the proportions of each bet the players are taking. It's only mathematically possible to determine the exact house edge on a single bet at a time. The Wiz proposed a proportion of bets that would match with what the Macau casinos are reporting for the investors. But the actual proportions for each bet and thus the combined house edge is something that would vary from casino to casino, city to city, and would require a lot of observation and data collection. I'm certainly not an expert on the gambling industry, so I don't know if that kind of data exists or would be available. Based on the people I've seen playing Baccarat (very superstitions, try to play streaks, will bet the Tie if it hasn't come up in a while), the 2.85% they use in Macau doesn't sound too far off.
Quote: AcesAndEightsNo, this is incorrect. Hold = Amount casino keeps / Total value of chips purchased. If someone buys $1000 in chips, then goes directly to the cashier to cash them out, the hold for this person would be 0%; this will skew the observed hold, and the person didn't even wager anything.
Ah I see. I'm approaching it from a sports betting background where hold has a slightly different meaning. Thanks for clarifying.
Quote:Yes, the actual house edge depends on the proportions of each bet the players are taking. It's only mathematically possible to determine the exact house edge on a single bet at a time. The Wiz proposed a proportion of bets that would match with what the Macau casinos are reporting for the investors. But the actual proportions for each bet and thus the combined house edge is something that would vary from casino to casino, city to city, and would require a lot of observation and data collection. I'm certainly not an expert on the gambling industry, so I don't know if that kind of data exists or would be available. Based on the people I've seen playing Baccarat (very superstitions, try to play streaks, will bet the Tie if it hasn't come up in a while), the 2.85% they use in Macau doesn't sound too far off.
Thanks.
Realized house advantage = win / handle. This does converge on the house edge, but it's almost never measured (except for slots).
Quote: MathExtremistTo clarify, table hold = win / drop. Drop = $ in drop box. Win = extra cash in the cage after all the chips have been returned. Most table game pits cannot track handle (i.e. total amount bet, total wager, action, "coin-in" in slot parlance, etc.) so the casinos use the data they *can* collect.
Spot on.
Quote: MathExtremistRealized house advantage = win / handle. This does converge on the house edge, but it's almost never measured (except for slots).
Also true - H.E is never directly measured for table games, as it is impossible. Each bet's transaction would have to be tracked and recorded, which cannot be done in the real world. What can we do then?
Hence the fairly lose reverse engineering done ("ball park") as follows on a "well, this is what we can do with the casino figures we got" basis: Assumed Table game House edge ~ hold * 0.1
If a table held 28% for a three month period, it is assumed to be performing with roughly a 2.8% H.E. for that period; so, if it's nominal (official) math report house edge is 2.5%, it is assumed to be performing within range, and acceptable.
This is how we "oversee" our products that are active in the field, for example:
Pai Gow game "x" has been performing in a three month period with a 27% house edge, on $850,000 drop at casino x with a table hold of $229,500; it has an official H.E. of 2.47% house plus it was install with side bet y that has a H.E. of 3.2%. So, it is performing within range, and no dealer training and no "best practices" need to be suggested to the casino operator. Fine. Baccarat table "y" is performing with a 16% H.E from $1,800,000 in buy-in drop, holding $288,000. It has an official house edge of 1.3%. It is performing slightly above spec. Again fine.
Table game "z" saw $90,000 worth of drop, and held $9,000. Table hold was 10% but it has an official house edge of 3.1%. Not good. It's performance indicates it has a small drop, and it is holding less than what could be expected, which would be closer to $28,000; the casino operator expressed a concern over "table game z." We examine with Casino operator "q" dealer training and procedure ("is there a misunderstanding on payout procedures or hand evaluation procedures?"), possible Advantage Play or dealer game protection ("is dealer flashing hole cards?") product flaw ("is side bet payout misprinted somewhere?) etc., etc., etc.,
Quote: PaigowdanSpot on.
Also true - H.E is never directly measured for table games, as it is impossible. Each bet's transaction would have to be tracked and recorded, which cannot be done in the real world. What can we do then?
Hence the fairly lose reverse engineering done ("ball park") as follows on a "well, this is what we can do with the casino figures we got" basis: Assumed Table game House edge ~ hold * 0.1
If a table held 28% for a three month period, it is assumed to be performing with roughly a 2.8% H.E. for that period; so, if it's nominal (official) math report house edge is 2.5%, it is assumed to be performing within range, and acceptable.
This is how we "oversee" our products that are active in the field, for example:
Pai Gow game "x" has been performing in a three month period with a 27% house edge, on $850,000 drop at casino x with a table hold of $229,500; it has an official H.E. of 2.47% house plus it was install with side bet y that has a H.E. of 3.2%. So, it is performing within range, and no dealer training and no "best practices" need to be suggested to the casino operator. Fine. Baccarat table "y" is performing with a 16% H.E from $1,800,000 in buy-in drop, holding $288,000. It has an official house edge of 1.3%. It is performing slightly above spec. Again fine.
Table game "z" saw $90,000 worth of drop, and held $9,000. Table hold was 10% but it has an official house edge of 3.1%. Not good. It's performance indicates it has a small drop, and it is holding less than what could be expected, which would be closer to $28,000; the casino operator expressed a concern over "table game z." We examine with Casino operator "q" dealer training and procedure ("is there a misunderstanding on payout procedures or hand evaluation procedures?"), possible Advantage Play or dealer game protection ("is dealer flashing hole cards?") product flaw ("is side bet payout misprinted somewhere?) etc., etc., etc.,
Thanks for the explanation. Again, I'm coming from a purely sportsbetting background so I'm used to being able to track handle.
You seem to have a lot of experience with this...for a Vegas Strip casino, do you happen to know rough H.E. for Baccarat and Craps?
Quote: PaigowdanH.E is never directly measured for table games, as it is impossible. Each bet's transaction would have to be tracked and recorded, which cannot be done in the real world.,
Slot HE manifests itself on a daily basis, table
games do not. If a casino could get by on just
offering slots, they'd do it in a heartbeat. Table
games are a nightmare, but they do make money
and cater to a certain portion of the gambling
public.
Slots are cheap because they take reletively small area, have small, incidental human salaries and expenses per machine, and operate quickly, with usually a 7-12% HE. Some Progressives go 1% or less HE. Nonetheless, as previously posted there are far more slots than tables for this reason. Card-games as gambling will always have their place in a Casino. The future however definately points to automated gaming at tables (read: video tables with no Dealer).
Quote: 98ClubsThe HE for any bet placed usually refers to the long-term average of random distribution. Over short periods of time this HE varies due to randomness. (a.k.a. variance). Even a Slot machine with a 9% HE can have periods of +EV, and more likely periods of -EV.
In your 9% example, I don't see how a slot machine can have a period of +EV.
In the end, all games converge to HE, whether it's slots, BJ, baccarat, sports betting, Keno, etc. My original question was the long-term HE on games that have varying HE bets within them (baccarat, craps).
Quote: JonDoughIn your 9% example, I don't see how a slot machine can have a period of +EV.
In the end, all games converge to HE, whether it's slots, BJ, baccarat, sports betting, Keno, etc. My original question was the long-term HE on games that have varying HE bets within them (baccarat, craps).
Baccarat and craps can have wild swings in the short term, especially if a crap table has a Fire bet (huge payout side bet) on it.
What happens with Bac and crap tables is that they MAY have some wild & hard short term swings, but over the long haul are money makers and stay true to their H.E. of the main bets You have to trust the math over the long haul.
On a Long-term basis, the house edge on Bac is accurate at about 1.4% (14% table hold) with large cash drops, and craps is about 2% (20% TH), also with large cash drops. Pai Gow hold fairly steady at about 22%-30% table hold, and Blackjack in mature markets of experienced players like Atlantic City can have a slim house edge and table hold, sometimes scary, but with large drops. Side bet patronage helps the BJ house edge - and cash 'hold' of the games, - and BJ layouts will always have some sort of side bets on them to pull in extra income. A necessary evil from the casino operators POV.
Roulette seems to be very steady by comparison. Full tables where Everyone plays their own numbers and styles, the aggregate bets cancel each other out, - with the zeros pulling in a steady house edge. Roulette gets less dollar action than it used to; in American Markets it's BJ, craps, Pai Gow Poker, and carnival games like Three card poker and Ultimate Texas Hold 'em. In Asia, 80% of the action seems to be Baccarat. In Europe, a lot more Roulette action. And Asian tiles - Atlantic City has 50 or so tables.
If you search hard, a lot of gaming jurisdictions post their table drop and hold numbers like Missouri Gaming Commission, along with New Jersey. A TON of information can be determined from their data.
Quote: 98ClubsThe HE for any bet placed usually refers to the long-term average of random distribution. Over short periods of time this HE varies due to randomness. (a.k.a. variance). Even a Slot machine with a 9% HE can have periods of +EV, and more likely periods of -EV.
A slot machine can't have an expected value of +9%, unless there's some sort of jackpot. It might have an actual value of +9% over that period (looking backwards) but it's expectation cannot fluctuate, unless the conditions do.
Quote: Paigowdanin American Markets it's BJ, craps, Pai Gow Poker, and carnival games like Three card poker and Ultimate Texas Hold 'em.
I checked the Missouri Gaming Commission and in 2011
every month the top 3 were BJ, craps and roulette. Every
month they had the biggest drop. Pai Gow was usually
4th or 5th.
At Lumiere Place Casino two tables of Baccarat dropped $1.56M, while four tables there (twice as many) dropped $803K, about half as much.
If they (Missouri Gaming Commission) had tallies by table group, it would be easier.
The Baccarat is an exception I feel, outside of high-rollers on the strip and Maccau. Headcount on tables does not correspond to drop. 12 people playing $5 Pai Gow Poker is a lot different than one guy playing $5,000 a hand at Baccarat. More Chevy's than Bentleys, more action than drop.
me when you say roulette is getting less
dollar action than other games, when it
obviously isn't.
If we think that bankroll size is randomly distributed among table games, then it stands to reason that roulette-only players would lose their bankrolls the fastest and hence a drop in the game's action.
Quote: EvenBobI don't care about all that, Dan. Its just irks
me when you say roulette is getting less
dollar action than other games, when it
obviously isn't.
Bob, personally I think Roulette is a great game, but in our casino, and in too many casinos, the action is declining compared to blackjack, pai gow, and craps. It needs something to juice it up, exactly what, I dunno.
I will track down gaming commission stats on the # of tables in this regard.
Quote: thecesspitA slot machine can't have an expected value of +9%, unless there's some sort of jackpot. It might have an actual value of +9% over that period (looking backwards) but it's expectation cannot fluctuate, unless the conditions do.
A Customer sits down at a 3-coin 3-reel Slot machine and plays 3 coins. The spin wins 10 coins. The Customer plays 3-coins from the 10, and loses. The Customer plays 3 coins from the remaining 7 and loses. The Customer takes the 4 remaining coins from the tray and leaves. The profit is 1 coin based on 3 coins risked, a +33% gain.
The EV is positive and more than 9%... I did not say "it can't be more than +X EV", I said it can be positive, but is more likely negative, given that the machine has a -EV.
Quote: 98ClubsA Customer sits down at a 3-coin 3-reel Slot machine and plays 3 coins. The spin wins 10 coins. The Customer plays 3-coins from the 10, and loses. The Customer plays 3 coins from the remaining 7 and loses. The Customer takes the 4 remaining coins from the tray and leaves. The profit is 1 coin based on 3 coins risked, a +33% gain.
Sure but thats profit, or actual value, NOT an expected value of 33%.
Quote: PaigowdanBob, personally I think Roulette is a great game, but in our casino, and in too many casinos, the action is declining compared to blackjack, pai gow, and craps. It needs something to juice it up, exactly what, I dunno.
Paging Dave. Dave, you're needed the Roulette Revitalization area. Dave...
a good multi-roll side bet for Roulette would really help the game, I think. His Poker for Roulette bet has been discussed here.
Dave - Any action on it?
