Understanding how the house edge works in baccarat is absolutely key to developing any sort of baccarat strategy. Actually, it’s important for online casino gaming in any form. This little number is what decides which casino games are the best, which bets are the optimal choice, and even which casinos to play at.

The House Edge represents the statistical advantage a casino has over the players. If you ever heard the term ‘the house always wins,’ that’s what it’s referring to. Let’s take a closer look at how it all works in online baccarat games.

What is the House Edge?

Let’s define our terms first. When we say that the house always wins, it’s not because they are cheating or something like that. Simply put, the casino is always slightly more likely to win than the player. The easiest example can be seen in roulette.

A typical European roulette wheel has 37 pockets – 18 black, 18 red, and one green zero. Now, one of the most basic types of bet in that game is a so-called even-money Black/Red bet. It simply predicts whether the ball will land on a black or red pocket, and it doubles your stake if successful. So, you have a roughly 50% chance to win, so it seems fair that the payout is directly proportionate to that risk.

However, your chances of success in this example aren’t 50% – they are roughly 48.65%. This difference is the House Edge in roulette. Essentially, the casino has a statistical advantage when it comes to the ratio of risk vs. reward in casino games. The smaller it is, the better for the player.

It’s also worth noting that the RTP is essentially the house edge of a game subtracted from 100%. For example, online baccarat games generally have a house edge of around 1.09%. That means that the RTP is usually around 98.1%.

How the House Edge Works in Baccarat

So, how does the casino have an advantage in baccarat? Two reasons. The first is that the banker bet is always more likely to win. The second is the 5% commission usually charged on banker bet wins.

Well, it mostly has to do with the rules about drawing the third card. In short, the banker’s hand is completed last, which gives a slight advantage in a game like baccarat. Many of the banker’s drawing situations depend on what the player side has in-hand. We’ll put it into numbers to paint a clearer picture.

If we exclude tie results, the player bet wins 49.32% of the time, while paying out at odds of 1:1. Once you factor in ties, the difference is even bigger, but that’s the gist.

The banker side, on the other hand, wins 50.58%, which is why the commission exists in the first place.

Once you factor in ties and the commission, the house edge on player bets is on average 1.36%. The house edge on baccarat banker bets, on the other hand, is a superior 1.36%. Tie bets, as you probably know, are far behind at 14.4%.

Does that mean you should only ever bet on Banker in Baccarat? Not really – you’re better with developing a more reliable strategy in the long term. You should still probably steer clear of Tie bets, though.