Baccarat is one of the world’s most popular casino games, with a history that stretches back to Europe and a recent boom in Asia. But while the game may be familiar to seasoned gamblers, many Americans still don’t know much about it. And that is a shame because the game has the potential to be the highest paying bet in the casino, offering up to eight-to-one on a winning Banker hand. But it is a notoriously risky bet, and one that is often made on a hunch or irrational trend. This is especially true for high rollers, who are attracted to baccarat’s low hold percentage and the opportunity to win big on a small bet.
The basics of baccarat are fairly simple: bettors place wagers on either the player, banker, or tie. The dealer deals two cards to each participant, and whichever hand has a total value closer to nine wins the round. Unlike blackjack, which allows multiple bets on the same hand and has its own set of rules for when to draw a third card, baccarat’s drawing rules are fixed. This reduces the number of possible combinations, making the decision-making process less complex.
But despite the simplicity of the game, a variety of gambling strategies exist, including the famous Martingale strategy that involves increasing your bet size after every loss in the hope that a future win will recoup all your previous losses. While it may work for some players, it’s not a good idea to rely on this type of strategy when playing baccarat. It can lead to excessive bet sizes, which can quickly deplete your bankroll. And if you lose, you’ll be even more desperate for a win, leading to further risky betting decisions.
A more reasonable approach is to focus on the frequency of past outcomes, which can be more informative than a particular outcome’s timing or duration. In baccarat, we found that gamblers consistently favored betting on player and banker wins that had occurred recently. This preference could be a manifestation of the hot outcome fallacy, in which people erroneously perceive meaningful and predictable patterns in sequences that are, in fact, random. However, our results also indicate that other factors, such as the illusion of control (Langer, 1975) and the illusion of validity (Tversky & Kahneman, 1974), may contribute to positive recency.
While our data suggest that baccarat gamblers tend to follow trends, the exact mechanisms are unknown and require further study. One possibility is that the shuffled cards in baccarat ensure that past outcomes are relatively random, making them more likely to be repeated in future rounds. Alternatively, the fact that baccarat bets are placed before the cards are dealt can make past outcomes seem more relevant than they would in roulette, where the outcome is determined only after the bet has been placed.
In addition to the psychological influences discussed above, our findings support a more general explanation for positive recency: The law of large numbers. The principle states that the probability of a randomly chosen event occurring is proportional to its magnitude, so if an outcome occurs once, it will occur again with the same likelihood. This effect is reinforced by the fact that the occurrence of a past outcome increases the odds of its repetition, and that the perception of increased odds leads to an increase in bets on that outcome.
