Baccarat is often called one of the fairest casino games, and the math supports this claim. With house edges of just 1.06% (Banker) and 1.24% (Player), baccarat offers some of the best odds in the casino — second only to certain bets in craps and comparable to blackjack played with perfect strategy. Understanding house edge helps you set realistic expectations, choose the right bets, and recognize why certain variations of baccarat are better than others. It also explains why, despite the low edge, casinos still profit from the game. This guide explains what house edge means in baccarat, why different bets have different edges, and what these numbers mean for your expected outcomes.
What Is House Edge?
House edge is the mathematical advantage the casino has over players, expressed as a percentage of each bet.
In baccarat:- Banker bet: 1.06% house edge - Player bet: 1.24% house edge - Tie bet: 14.36% house edge (at 8:1 payout)
What this means:For every $100 you wager on the Banker bet over thousands of hands, you can expect to lose $1.06 on average. For every $100 on Player, you can expect to lose $1.24.
Important clarifications:- House edge is a long-term average across many hands - You can win or lose any individual session - Variance (luck) dominates short-term results - The house edge ensures the casino profits over time
Why the Banker Bet Has a Lower House Edge
The Banker and Player bets are nearly identical, but the Banker bet wins slightly more often.
Win frequencies (excluding ties):- Banker: 50.68% of decisions - Player: 49.32% of decisions
Why the Banker wins more often:The third card drawing rules favor the Banker hand slightly. The Banker acts after the Player, and the Banker's third card decision depends on the Player's third card. This small informational advantage makes the Banker hand win about 1.36% more frequently than the Player hand.
The 5% commission:To balance this advantage, casinos charge a 5% commission on Banker bet winnings. Even after this commission, the Banker bet still has a lower house edge than the Player bet.
The math:Without the commission, the Banker bet would actually favor the player (negative house edge). The 5% commission brings it back to a 1.06% house edge for the casino. For more on betting options, see our [baccarat bets explained](#) guide.
How House Edge Is Calculated
House edge is determined by comparing the true probability of winning to the payout offered.
Banker bet calculation (simplified):- Probability of winning: 45.86% - Probability of losing: 44.62% - Probability of tie: 9.52% - Payout: 1:1 minus 5% commission - House edge: 1.06%
Player bet calculation:- Probability of winning: 44.62% - Probability of losing: 45.86% - Probability of tie: 9.52% - Payout: 1:1 (no commission) - House edge: 1.24%
Tie bet calculation:- Probability of winning: 9.52% - True odds: approximately 9.5:1 - Payout: 8:1 (or sometimes 9:1) - House edge: 14.36% (at 8:1), or 4.84% (at 9:1) The Tie bet has a terrible house edge because the payout doesn't match the actual probability.
What 1.06% House Edge Means in Practice
Let's translate the house edge into real expected losses:
Example 1: 100 hands at $10 per hand- Total wagered on Banker: $1,000 - Expected loss (1.06%): $10.60
Example 2: 500 hands at $20 per hand- Total wagered on Banker: $10,000 - Expected loss (1.06%): $106
Example 3: 100 hands at $10 per hand (Tie bet)- Total wagered on Tie: $1,000 - Expected loss (14.36%): $143.60 The difference between Banker/Player bets and Tie bets is dramatic. Avoiding Tie bets saves you significant money over time.
Important note:These are long-term averages. In any individual session, you could win or lose much more. Variance creates short-term swings that don't match the expected value.
Commission Impact on Banker Bet
The 5% commission on Banker wins is a critical part of the house edge.
Example:Bet $100 on Banker and win: - Gross win: $100 - 5% commission: $5 - Net win: $95
Why the commission exists:Without it, the Banker bet would have a negative house edge (around -1.36%), meaning players would have a mathematical advantage. The 5% commission brings the house edge back to +1.06% for the casino.
Commission-free variants:Some casinos offer "no commission" baccarat where Banker wins with a total of 6 pay 1:2 instead of 1:1. This increases the house edge to approximately 1.46%, making it worse than standard baccarat.
Recommendation: Standard baccarat with 5% commission offers better odds than commission-free variants.
Comparing Baccarat to Other Casino Games
Baccarat's house edge is among the lowest in the casino.
House edge comparison:- Baccarat (Banker): 1.06% - Baccarat (Player): 1.24% - Blackjack (perfect basic strategy): 0.5% - Craps (Pass/Don't Pass): 1.41% - European Roulette: 2.7% - American Roulette: 5.26% - Caribbean Stud Poker: 5.22% - Slots: 2-15% (varies widely) - Keno: 20-40%
Key insight:Baccarat is one of the fairest games in the casino. Only blackjack (with perfect strategy) and certain craps bets offer better odds. Unlike blackjack, baccarat requires no skill or decision-making, making it the lowest-effort, low-edge game available.
Why Casinos Still Profit
If the house edge is only 1.06%, how do casinos make money on baccarat?
1. Volume of playBaccarat tables deal many hands per hour. Small edges accumulate over thousands of hands.
2. High rollersBaccarat attracts high-stakes players who wager thousands or tens of thousands per hand. Even a 1.06% edge generates significant profit at these bet sizes.
3. Tie and side betsMany players make Tie bets or side bets with much higher house edges (4-15%), increasing casino revenue.
4. Mathematical certaintyThe house edge is guaranteed over time. Casinos profit from the certainty of mathematics, not individual sessions.
Example:A high roller betting $10,000 per hand over 100 hands: - Total wagered: $1,000,000 - Expected casino profit (1.06%): $10,600 Even with a tiny edge, large volume creates substantial revenue.
Variance vs House Edge
House edge and variance are different concepts:
House edge: The long-term mathematical advantage the casino has
Variance: The short-term swings in wins and losses
In baccarat:Baccarat has moderate variance. You'll experience winning and losing streaks that feel much larger than the 1.06% edge would suggest.
Example:You might win 15 out of 20 hands (a great session) or lose 15 out of 20 hands (a terrible session). Neither contradicts the house edge — variance creates these swings in the short term. Over thousands of hands, variance evens out and the house edge dominates. For more on variance, see our guide on [RTP and volatility explained](#).
Can You Overcome the House Edge?
For baccarat, the answer is no (with extremely rare exceptions).
Why you can't beat baccarat:- Each hand is independent and random - There are no decisions to make that affect outcomes - Betting systems don't change the house edge - Card counting doesn't work effectively (the edge would be tiny even if attempted)
The rare exception:Edge sorting (exploiting manufacturing defects in card backs) has been successfully used by a tiny number of highly skilled players. However: - It requires specific conditions that are virtually never present - It's considered cheating in most jurisdictions - Casinos actively prevent it - Most players will never have the opportunity
For 99.99% of players:Baccarat cannot be beaten. The house edge is built into the structure. The best you can do is choose the Banker bet to minimize that edge.
Why Baccarat Is Still a Good Game
Despite the house edge, baccarat is attractive for several reasons:
1. SimplicityNo decisions, no strategy to learn. Just pick Banker or Player.
2. Low house edgeAt 1.06-1.24%, it's one of the fairest games available.
3. Fast paceHands are quick, creating an engaging experience.
4. Low mental effortUnlike blackjack or poker, you can play baccarat without thinking.
5. Predictable costWith a known house edge, you can estimate expected losses and budget accordingly.