Bits & Odds

Where the 5% Commission Comes From, and What EZ Baccarat Changes

Updated 2026-11-08

The Banker hand in baccarat wins more often than the Player hand—45.86% to 44.62%—because the Player acts first and the Banker’s third-card rule uses the value of the Player’s third card. Without the 5% commission (or EZ Baccarat’s barred three-card 7), betting Banker would give the player a 1.24% edge over the house.

At first glance, Punto Banco looks completely symmetrical. Both sides receive two cards, tens and faces count as zero, and whichever hand finishes closer to 9 wins. Yet every standard table taxes winning Banker bets 5% while paying winning Player bets full even money.

Why acting second gives Banker a 1.24% head start

The asymmetry lives in the third-card tableau (Ethier, 2010). When neither hand holds a natural 8 or 9:

  • Player acts first and blind: Player must draw a third card on any two-card total of 0 through 5 and stand on 6 or 7. When Player draws on 4 or 5, a high card (6, 7, 8, or 9) can actually reduce the hand’s modulo-10 total.
  • Banker acts second with extra information: If Player stood on 6 or 7, Banker draws on 0 through 5. If Player drew a third card, Banker checks what card Player just caught before drawing on totals of 3, 4, 5, or 6. For example, when Banker holds a two-card 6, Banker draws only if Player’s third card was a 6 or 7—the exact cards likely to have pushed Player to 6 or 7.

Across all 4,998,398,275,503,360 six-card permutations of an 8-deck shoe, that positional advantage lets Banker win 45.8597% of hands compared with 44.6247% for Player, with 9.5156% ending in a tie.

If both bets paid 1 to 1, Player would carry a 1.24% house edge while Banker would hand the player a +1.24% advantage. Charging a 5% commission on Banker wins (paying 0.95 to 1) flips Banker to a 1.06% house edge.

Why casinos like EZ Baccarat even with a lower Banker edge

Cutting the Banker house edge from 1.06% to 1.02% looks like a giveaway, but commission-free dealing pays the casino back in two ways (Shackleford, Wizard of Odds):

  1. Faster hands per hour: Tracking 5% commissions in small change slows down every payoff and collection. Turning a three-card 7 into a push lets the dealer settle the table at blackjack speed, dealing 20% to 30% more hands per hour.
  2. High-margin side bets: EZ Baccarat adds two optional felts beside the main boxes. Dragon 7 pays 40 to 1 if Banker wins with that barred three-card 7 (2.25% probability, 7.61% house edge). Panda 8 pays 25 to 1 if Player wins with a three-card 8 (3.45% probability, 10.19% house edge).

Can card counting beat baccarat? What Thorp and Walden (1966) found

Shortly after publishing Beat the Dealer for blackjack, mathematician Edward O. Thorp and William E. Walden (1966) analyzed Nevada baccarat in the Journal of the American Statistical Association. They tested whether tracking cards as an 8-deck shoe is dealt could overcome the house edge:

  • Main bets (Player and Banker): Because every card drawn feeds a fixed modulo-10 rule for both sides at once, removing high or low cards shifts the Player and Banker edges by tiny amounts. Thorp and Walden concluded that no practical winning strategy existed on the main even-money bets.
  • High-payout side bets: In the 1960s, Nevada tables offered 9-to-1 side bets on Natural 9 and Natural 8. By tracking the total remaining cards and the remaining 9s (or 8s), Thorp and Walden proved the probability of a natural climbed above 10% often enough near the end of the shoe to make those side bets positive-expectation, which prompted casinos to remove them.

Compare every standard and EZ Baccarat bet in our Baccarat Odds & House Edge Table, or toggle EZ Baccarat live in the Free Baccarat Game.

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