North America: It's Time to Adopt “No Commission” Baccarat
"People will try to tell you that all the great opportunities have been snapped up. In reality, the world changes every second, blowing new opportunities in all directions, including yours." (Ken Hakuta)
No Commission Baccarat is a ubiquitous game across properties in Asia, Australia and New Zealand (including Macau where Baccarat represents over 90% of the gaming revenue). This interview article discusses how one gaming executive in Macau, Alidad Tash, popularized the game in Macau.
We also discussed No Commission Baccarat in this webinar that we hosted earlier this year. The purpose of this blog post is to take a deeper dive into Baccarat and why we believe that the time is ripe to adopt this variant in North America, especially for those properties where it is an important segment of the gaming revenue. We will discuss:
- What is No Commission Baccarat (aka Nepal Baccarat, Commission-Free Baccarat, Super Six)
- How this variant helps improve your mass Baccarat performance, while improving the player experience and reducing dealer payout errors
What is No Commission Baccarat
The name “No Commission” or “Commission-Free” attributed to this Baccarat variant is a misnomer, or maybe an opportunity for a promotional puffery, as the game does provide a commission for the House. The only difference is how it is paid/collected by the House.
In traditional Commission Baccarat, the dealer takes a 5% commission for every Banker winning bet, while No Commission does not. The only exception is when the Banker wins with any value of 6, which occurs once every 19 hands on average, and the Banker’s commission for winning bets is 50%.
In some Asian jurisdictions, this Baccarat variant is also called Super Six, referencing the Banker 6 and thereby avoiding the name “No Commission”.
How much does it cost?
Since this Baccarat variant is non-proprietary, there are no licensing fees associated with deploying it. More importantly, no additional expenditure is required for implementing it, as it uses the same layout and equipment and can be used with existing side bets.
Why is it so popular in Asia Pacific?
As per the article mentioned earlier, this version of No Commission Baccarat was successfully adopted and gained popularity in Asia because the table layout, rules and player experience are the same as traditional Baccarat, with only one difference: the way the commission is collected.
Let’s take a deeper dive into a few qualitative and quantitative factors that made the No Commission Baccarat variant popular among operators in Asia Pacific and why the same arguments will apply in any jurisdiction, including North America and Europe.
The Baccarat Player
Baccarat is a slow game by definition. From a hand to the next, there are multiple interactions and events that contribute to this slow pace. Some of the factors that slow down the pace contribute to the excitement of the game (e.g. squeezing the cards), while others take away from the excitement (e.g. when waiting for other players to make up their mind on whether to bet on Player or Banker; we propose solutions for this case in this blog post).
As a player, waiting to be able (allowed) to take possession of winning wagers is one of those factors that diminishes the excitement from the game. In Baccarat, when the dealer is paying winning wagers, all players have to wait, without touching their winning wagers, until the very last player to the left of the dealer gets paid. This is due to game security, as the dealer can get confused on the succession of payouts made.
There is a different experience when the Player hits and the winning wagers are being paid 1:1, even money, in a fast motion versus when the Banker winning wagers are being paid and calculations/chip plucking are taking place for each and every spot. On a busy action game, a player in the anchor spot gets paid, but it might not be able to touch their winning wager for a few minutes until the very last player is paid.
The No Commission Baccarat variant offers a better customer experience by having almost all Baccarat winning wagers being paid even money in the same fashion as per winning Player wagers, thus at a faster pace. More importantly, the players don’t have to wait longer to place their next wager.
As a dealer dealing Traditional Commission Baccarat, ~46% of all hands dealt (Banker wins) will incur a 5% commission-deducting payments that look like this:
Deducting 5% commission for each and every spot is cumbersome and implies:
- Mentally calculating 5% for a variety of wager amounts, often changing from a spot to the next.
- Making the correct change, plucking a multitude of chip denominations with often players trying to ‘help’ by throwing cheques or coins in an attempt to round-up the payout. This happens frequently and often confuses the dealer even further.
On the other hand, when paying Player winning wagers (~45% of the time), the payouts look like this - even money - for the same level of action:
By contrast, when dealing No Commission Baccarat the dealer will make even-money fast payouts ~85% of the time and only for the rest of 15% of the time will have to do any further calculations. The 0.5 to 1 are also much easier calculations than calculating 5%.
As a result, the Dealer’s life is made easier for delivering an exciting and more efficient game, and less prone to error and mistakes.
The Operations Team
Casino Management, from Supervisory level all the way up, will experience benefits from adopting the No Commission Baccarat variant by:
- Reduced leakage: more straight-forward, even-money, payouts and no complicated 5% calculations with the inevitable mistakes - will reduce wrongfully made payouts
- Reduced surveillance calls: it is much easier for the surveillance operator to monitor the payouts
- Reduced fills for lower denominations casino cheques
- Reduced time dealing with customer complaints and conflicts.
From a quantitative point of view, the superiority of the No Commission variant stems from two levers: Game Pace (RPH) and House Edge (HE).
Game Pace (RPH)
As mentioned above, in Traditional Commission Baccarat ~45% of the hands will be fast-paying, even-money, player-winning wagers. The remaining ~55% of hands will be slow-paying hands: either commission-calculating Banker winnings, or tie hands that also require calculations (however, ties usually have less spots played when hit).
For the No Commission variant, the percentage of hands with simple, fast, even-money payments is ~85%, as all Player winning wagers plus a great majority of Banker winning wagers will be paid even money. Only the rest of ~15% of hands will require some form of calculation and extra chip plucking.
This difference is conducive to No Commission Baccarat allowing to deliver almost 2 times or more fast-paying hands, an increase of ~35%. A game that is 35% faster, will show a corresponding improvement in the financial performance of the game in respect to Hold% (RPH being one of the determinants of Hold%) and Win/Open Hour.
House Edge (HE)
In respect to the House Edge: while the HE for bets placed on Player are the same for both traditional Commission and No Commission variants, for bets on the Banker side the HE increases from 1.06% in traditional Commission to 1.46% in the No Commission variant, an increase of 17%.
[Probabilities and HE calculations available at Wizard of Odds:
https://wizardofodds.com/games/baccarat/basics/ - Traditional Baccarat
https://wizardofodds.com/games/baccarat/appendix/6/ - No Commission Baccarat]
Introducing a product that offers the same game of Baccarat, but can be dealt ~35% faster and with a 17% higher HE will enhance your mass Baccarat segment performance accordingly, with no real detrimental impact to the customer. Moreover, it’s often perceived as a benefit to the patron that wants to place a wager on the next round, instead of waiting for a lengthy payout.
Some properties in North America and Europe have already made the change and are seeing the benefits. If you’re reading this, and you haven’t already, it's time to adopt No Commission Baccarat at your casino!
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As SVP and Head of North America Business, Ari brings over 15 years of operations experience across multiple jurisdictions in North America including Las Vegas, Atlantic City, Florida, Pennsylvania, and Connecticut. Ari oversees Tangam’s global client base and helps operators adopt yield management best practices.
With nearly 20 years of casino experience, Victor has worked at various Canadian casinos where he trained staff and managed both table games and slots operations. At Tangam, he helps clients all over the world implement data-driven management of table games spreads and pricing on the gaming floor to achieve their revenue management objectives.