The growing proliferation of baccarat side bets across Asia’s casino floors has opened the door to advantage play, with teams of exponents now using artificial intelligence to identify when these side bets offer a mathematical edge over the house, according to analysis from casino analytics and strategy consultancy Differential Labs.
The use of such technology is, the analysis adds, not only cutting into casino win rates but also making it extremely difficult to detect, with some popular side bets used in places like the Philippines and Singapore found to be particularly susceptible.
It is estimated that advantage play leakage is costing operators across Asia at bricks-and-mortar and online properties between US$500 million and US$700 million annually.
In a blog titled, “On Bots and Boffins: Baccarat side-bet advantage play,” Differential Labs notes that although side bets comprise only 5% of betting volume, they now account for 40% to 60% of baccarat revenue at many casinos, making them a lucrative option for operators but also an increasingly attractive target for advantage players.
And while this first emerged as a major concern in the online environment, where bots are commonly deployed, “the risk is now becoming more prominent in bricks-and-mortar casinos, particularly in Asia.”
According to the analysis, technology is changing the economics of advantage play, with computer-aided counting coupled with AI allowing players to identify opportunities more accurately and wager more efficiently – potentially tripling profits versus flat-betting alone.
This is because AI enables “portfolio counting,” which allows an advantage player to watch multiple side bets simultaneously and then bet on whichever becomes favorable. Differential Labs notes that an advantage player counting one bet in Macau finds a positive EV (expected value) situation one to three times a shoe but counting all the bets will find around seven.
“The arithmetic follows from there. Flat-betting ‘Super Lucky Seven’ returns 0.27 units per shoe on seven units wagered. The same seven units, allocated across all the bets (portfolio counting), return 1.04.
“An advantage player using portfolio counting, [their] odds of leaving a shoe with a profit move from roughly 8% to nearly one in three.”
The concern for operators is that the number of players using AI-assisted counting has grown since 2021, the analysis observes.
“Asian teams operate with floor monitors, bankroll leaders and offsite coordination,” it states. “AI-powered apps are sold openly online. Electronic table games are the softest target, because one advantage player can watch several games at once and the vendors haven’t made bet level data accessible.”
Importantly, not all side bets are equal when it comes to threat, with Differential Labs identifying “High Tie-0,” “High Tie-3,” “High Tie-9” and “High Tie-8” – side bets that are gaining popularity in Manila and Singapore – as the riskiest of all side bets, along with “Dragon Seven” and “Four Card Tie.” This is because they are easy to count and deliver profitable shoes consistently.
Popular Macau side bet “Monkey/No Monkey” is considered the easiest game of all to count, with an advantage player able to improve their chances by 46% over random selection with no computer intervention required, although the edge is blunted by the bet’s volatility.
“Lucky Six,” “Pair Plus,” “Small Tiger” and “Super Lucky Seven” are considered either challenging to count or too volatile to deliver consistently positive shoes. Notably, the side bet “Big/Small Tiger” – which accounts for around 20% of revenue in Macau – is described as difficult for players to find a durable edge.
Differential Labs also warns that, even though some bets are difficult to count and not lucrative as a standalone bet, they may still be risky, because when merged with other bets – which can make advantage play hard to detect – they can nevertheless become an integral part of lucrative counting scheme.
However, for operators, AI is both the problem and part of the solution.
“Rather than deeper cut cards, restrictions and added friction, casinos can use AI to identify suspicious play proactively and at scale,” the report states.
As widely reported by Inside Asian Gaming, baccarat side bets have become increasingly common across Asia due to the installation of smart table technology which allows for more innovative table layouts due to the increased chip security it provides.
