Baccarat Third Card Rule

Baccarat’s third-card rule is the key to the game’s well-known house edge: the Banker bet carries a house edge of 1.06%; the Player bet edges up to 1.24%; but the Tie bet’s edge is far worse, at 14.36%.

The crucial differences in house edge stem from the structure of the third card rule – rules that govern whether the Banker must take a third card, based on the value of the first two cards and, for the Banker, on the Player's third card.

The Third-Card Logic

Once the initial two cards are dealt, the hand rolls to the Player. A Player with a total of 0 to 5 must draw a third card, while 6 or 7 is considered a strong hand that must stand.

For the Banker to draw, it must meet two conditions: its total must be 0 to 5, and the Player must have drawn. If the Player stands, the Banker simply plays by its own total, drawing on 0 to 5 and standing on 6 or 7.

If the Player draws, the Banker decision expands and depends on both its own total and the Player’s third card. The Banker draws on 0, 1, and 2 regardless of what the Player has; on 3, it draws unless the Player's third card was an 8; on 4, it must draw against a Player 2 through 7; on 5, it draws against a 4, 5, 6, or 7; and it draws on 6 only against a Player 6 or Player 7. The Banker stands unconditionally on 7.

One exception comes first: if either hand has a natural, a two-card total of 8 or 9, neither hand draws and the round ends.

Why Banker Is Favoured

The rule structure explains the favoured position of the Banker in baccarat: the Banker draws last, knowing whether the Player drew, and so wins more frequently than the Player.

The Tie Bet's Cost

A Tie is when both hands have equal totals. At the standard 8 to 1 payoff, the house edge on the Tie bet is 14.36%.

What the Payouts Mean

The rule that the Banker draws after the Player also explains a difference in payout rules between the Player and the Banker.

While winning Player bets pay exactly 1:1, the winning Banker payoff is set back by 5%. This occurs because on every winning Banker bet, the casino assesses a 5% commission, also called vig, or vigorish, or juice.

The commission is 5% of the winnings. For example, a £100 Banker bet that wins pays £95, not £100.

What the Rules Do Not Change

In the end, the baccarat third-card rule sets the structure from which the game plays out. The rules of drawing are fixed; the player makes no drawing decisions, so knowing the rules cannot reduce the house edge on Tie, Player or Banker.

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