Baccarat is one of the world’s most popular casino games, thanks to its straightforward rules and fast-paced play style. You might have seen the game tucked away in high-limit gaming areas or perhaps even in an early James Bond movie. The game’s sexy rituals and Bond-dipped mystique has even drawn many a clueless copycat to the table, but once players understand the house edge of this high-stakes game, they can make smarter bets that minimize losses and maximize wins.

Like most gambling, baccarat is a game of chance. However, gamblers can make more intelligent bets by focusing on the house edge and managing their bankroll conservatively. A basic understanding of how the game works can help players avoid the pitfalls of the hot-hand fallacy and other common betting mistakes.

The game’s simple: You bet on either the player or banker hand (the name of the hands is purely symbolic). A dealer draws three cards for each, following strict drawing rules. The side with a total closest to nine wins. Ten-value cards count as zero, while aces count as one. Players can also place a third bet on a tie, which pays out eight to one but has the highest house edge of all three bets at over 14 percent.

A common strategy among baccarat players involves flat betting, placing the same amount on the player each round and avoiding progressive betting systems that can lead to runaway losses in cold streaks. In addition, avoiding hunches based on past results is important for long-term success.

Baccarat players can make a variety of additional bets besides the player and banker, including the player pair and the banker pair, which pay out 11 to 1 independent of the regular bets on the player and banker. However, these high-risk side bets have a higher house edge than the player and banker, with the player pair having the highest edge at 7.47 %.

Despite the relatively low house edge of baccarat, it is still one of the most expensive casino games. A player can easily lose a substantial amount of money if they bet on the wrong hand and do not follow sound bankroll management practices. In contrast, a good strategy can reduce the house edge by betting consistently on the Player or Banker and managing a bankroll conservatively. This is the best way to maximize wins and minimize losses over time.