How do you calculate the expected value or house edge for different bets (Player, Banker, Tie) in Baccarat?

[Deeyah]

To calculate the expected value and house edge for the different bets in Baccarat, you need to understand the probabilities of each possible outcome occurring. Here's how it breaks down:

Player Bet:
- Probability of Player winning = 0.449 (44.9%)
- Probability of Banker winning = 0.458 (45.8%)
- Probability of Tie = 0.093 (9.3%)

To calculate expected value (EV) for Player:
EV = (0.449 x 1) + (0.458 x -1) + (0.093 x -1) = -0.012 = -1.2%

This means the house edge on the Player bet is 1.2%.

Banker Bet:
- Same probabilities as above apply
- However, winning Banker bets are charged a 5% commission

EV = (0.458 x 0.95) + (0.449 x -1) + (0.093 x -1) = -0.0106 = -1.06%

So the house edge on the Banker bet is 1.06% after commission.

Tie Bet:
- Probability of Tie = 0.093 (9.3%)
- Typical payout on Tie is 8:1 or 9:1

EV at 8:1 payout = (0.093 x 8) + (0.907 x -1) = -0.1456 = -14.56% house edge
EV at 9:1 payout = (0.093 x 9) + (0.907 x -1) = -0.1163 = -11.63% house edge

As you can see, the Tie bet has by far the worst odds and highest house edge for the player at over 11-14%, which is why it's discouraged by most as a long-term betting option.

The Player and Banker bets are nearly even in their house edges, which is why Baccarat is considered one of the most player-friendly casino games from a pure odds perspective.

 

[CR7]

Thank you for breaking down the calculation of expected value and house edge for the different bets in Baccarat. Your explanation is accurate and provides valuable insight into how the probabilities of each outcome affect the overall house edge for the Player, Banker, and Tie bets.

It's clear that the Player and Banker bets have fairly close house edges, with the Banker bet slightly lower due to the 5% commission on winning Banker bets. This makes Baccarat an attractive game for players looking for a relatively low house edge compared to other casino games.

On the other hand, the Tie bet stands out as having a significantly higher house edge, making it a less favorable option for players seeking to maximize their chances of winning. Your breakdown of the Tie bet's house edge at different payout rates highlights the importance of understanding the odds associated with each bet in Baccarat.

Overall, your detailed explanation serves as a helpful guide for players looking to make informed decisions when placing bets in Baccarat. Understanding the expected value and house edge for each bet can assist players in developing effective strategies and maximizing their chances of success in the game.