Gamblers on a roll are often tempted to bet the house. But what happens if the house is on a winning streak?
Macau casino operators the Sands, Wynn and Galaxy StarWorld all reported record turnovers on their high-stakes baccarat tables in the second quarter. What's more, they all won a higher percentage of bets than they should have, going by the statistical house advantage built in.
But here is the real wild card: in the past year, both the Sands and Wynn have raised their forecasts for their 'win rate' on the VIP baccarat tables - the percentage of gambling chip sales they expect to win back - to levels above what Macau casinos have generally experienced to date.
The house is on a roll and is betting that the winning streak will continue. If their luck runs out, casinos may be in for a margin squeeze.
'It's a risk,' said Joe Fath, a gaming analyst at TRowe Price Associates. 'If you get these kinds of volumes, you should go back to statistical norms.'
Baccarat is an incredibly simple card game and one of the fairest in a casino as the odds are around 49-51 in favour of the house. Customers bet that either the 'player' or the 'banker' comes up with the winning hand. They can place an additional wager on a tie between the two but smart players tend to avoid 'tie' bets as the odds are around 43-57 in favour of the house.
Macau casinos' win rate has worked out to around 2.7-2.8 per cent historically. This means that for every HK$100 in VIP chips sold, a casino can expect to win back HK$2.70 to HK$2.80 on average.