Why is baccarat, the game of choice for wealthy whales, so volatile?

From month to month, casino gaming revenue can fluctuate dramatically thanks to one game, the most volatile one on the floor — baccarat.

It’s the game the wealthy whales and James Bond play, in which fortunes can be won or lost literally with the turn of a card.

“The bottom line is high-end baccarat is played at only a handful of properties and the number of players who play at the high end that move the needle every month is a very small group and does not represent the masses of customers that visit the Strip every month,” said Michael Lawton, senior economic analyst for the Nevada Gaming Control Board who monitors casino gaming win and has seen the volatility of play over time.

Baccarat is a relatively simple card game that involves the dealing of two cards each to the player and the bank — but the bank isn’t the casino; it’s the player’s opponent. In some instances, a third card is dealt.

Cards are assigned face value numbers with kings, queens, jacks and 10s having a value of zero and aces getting 1. The object is to come closest to 9 and if two cards total double digits, the first digit is removed. So, for example, if a player is dealt an 8 and a 6, his total would be 4 and if another gets a king and an ace, the total would be 1.

Players wager on the player in the game, the bank or a tie, which produces the highest payout.

While baccarat is played at some of Nevada’s high-end casinos, it’s the game of choice in Macao, where bettors will stand several players deep at each table to wager.

There aren’t as many baccarat tables as the casino’s most popular table game, blackjack, and those who play baccarat wager enormous sums.

“As a result, the game becomes volatile due to the fact that you don’t have hundreds of thousands of people playing the game during any given month,” Lawton explained. “You might have a couple hundred and if one or two of those players were to lose a large amount or win a large amount, the swings can be drastic.”

Lawton said it isn’t uncommon for baccarat players to make wagers of six figures per hand which adds to the volatility.

“A small group of players wagering large sums of money creates the unpredictability,” he said.

Over the past 20 years, the casino win percentage for baccarat has ranged between 10.7 percent in 2008 up to 21.9 percent in 2002. Normally, the casino win is around 11 or 12 percent for the game.

By comparison, the lowest blackjack win percentage over 20 years was 10.7 percent in 2010 and the highest was 14.8 percent in 2017 and 2023.

Over 20 years, the number of baccarat tables in the state has moved from less than 100 in 2002 and 2003 to nearly 400 in 2022 and 2023.

The highest amount wagered in baccarat occurred in 2014 when $12 billion was bet. Casinos won $1.5 billion that year, just under the high of $1.6 billion in 2013.

By comparison, there were more than 3,200 blackjack tables in 2005 and in 2023, there were just under 2,000.

The biggest year for blackjack was in 2007 when players wagered $11.5 billion. That year, casinos won $1.4 billion from players.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.