Main Article Content

Mark T Spence
Stephen J Sugden
Sudhir Kale


The house advantage for Baccarat is known, hence the theoretical win can be determined. What is impractical to theoretically determine is the frequency and financial implications of extreme events, for example, prolonged winning streaks coupled with various betting patterns. The simulation herein provides such granularity. We explore the effect of following the ‘hot hand’, that is, rapidly escalating bets when players are on a winning streak. To minimize their exposure, casino management sets a table bet maximum as well as a table differential. These figures can and do serve as a means to differentiate one casino from another. As the allowable bet maximum increases so does the total amount bet, which increases the theoretical winnings, thus suggesting that a high bet limit and differential is beneficial for the house. However, the greater are these amounts, the greater the number of shoes that end with players losing relative to a constant betting scenario (the number of times a player wins at all can drop from ~47% of the time to less than a quarter); but there will, on occasion, be more extreme payouts to players. This simulation is therefore intended to help casino managers set betting limits that maximize total winnings while bearing in mind both the likelihood and magnitude of negative outcomes to the casino.

Article Details



Alter, Adam L. and Oppenheimer, Daniel (2006), ‘From a fixation on sports to an exploration of mechanism: The past, present, and future of hot hand research’, Thinking & Reasoning, 12(4), 431-444.

Buchen, Peter W. and Grant, Andrew (2012), ‘A comparison of simultaneous Kelly betting strategies’, The Journal of Gambling Business and Economics, 6(2), 1-28.

Carlson, Kurt A. and Shu, Suzanne B. (2007), ‘The rule of three: How the third event signals the emergence of a streak’, Organizational Behaviour and Human Decision Processes, 104, 113-121.

Chau, Albert W. and Phillips, James G. (1995), ‘Effects of perceived control upon wagering and attributions in computer blackjack’, The Journal of General Psychology, 122(3), 253-269.

Cowley, Elizabeth (2013), ‘Forgetting the anxiety: Gambler’s reactions to outcome uncertainty’, Journal of Business Research (in press).

Croson, Rachael and Sundali, James (2005), ‘The gambler’s fallacy and the hot hand: Empirical data from casinos’, The Journal of Risk and Uncertainty, 30(3), 195-209.

Gainsbury, Sally, Sadeque, S., Mizerski, D, and Blaszczynski, A. (2012), ‘Wagering in Australia: A retrospective behavioural analysis of betting patterns based on player account data’, The Journal of Gambling Business and Economics, 6(2), 50-68.

Golec, Joseph and Tamarkin, Maurry (1998), ‘Bettors love skewness, not risk, at the horse track’, Journal of Political Economy, 106(1), 205-225.

Hannum, Robert C. and Cabot, Anthony N. (2001), Practical Casino Math, Thomas-Shore, Inc., Dexter, MI.

Inside Asian Gaming (2013), ‘Built for speed’, January, 26-29.

Joukhador, Jackie, Blaszczynki, Alex and MacCallum, Fiona (2004), ‘Superstitious beliefs in gambling among problem and non-problem gamblers: preliminary data’, Journal of Gambling Studies, 20(2), 171-180.

Keren, Gideon and Wagenaar, William A. (1985), ‘On the psychology of playing blackjack: Normative and descriptive considerations with implications for decision theory’, Journal of Experimental Psychology: General, 114(2), June, 133-158.

Krigman, Al (1997), ‘What causes streaks in gambling?’, Casino City Times. Accessed online Feb 28, 2013:

Lam, Desmond (2007), ‘An observation study of Chinese baccarat players’, UNLV Gaming Research & Review Journal, 11(2), 63-73.

Langer, Ellen J. (1975), ‘The illusion of control’, Journal of Personality and Social Psychology, 32(2), 311-328.

Ozorio, B. and Fong, D.K.C. (2004), ‘Chinese casino gambling behaviours: Risk taking in casinos versus investment’, UNLV Gaming Research & Review Journal, 8, 27-38.

Pitta, D.A., Fung, H.G. and Isberg, S. (1999), ‘Ethical issues across cultures: Managing the differing perspectives of China and the USA’, Journal of Consumer Marketing, 240-256.

Schwartz, David G. (2013), ‘Penny wise, player foolish? Slot-hold regulation and consumer preference’, Journal of Business Research (in press).

Sirri, Erik and Tufano, Peter (1998), ‘Costly search and mutual fund flows’, Journal of Finance, 53, 1589-1622.

Suh, Eunju (2011), ‘Examining the indirect impact of showroom entertainment on hourly slot gaming volume: The case of Las Vegas hotel-casino’, International Journal of Hospitality Management, 30, 522-529.

The Atlantic (2012), ‘The man who broke Atlantic City’. Accessed online Feb 7, 2013:

Turner, Nigel E. (1998), ‘Doubling vs. constant bets as strategies in gambling’, Journal of Gambling Studies, 14(4), Winter, 413-429.

Tversky, Amos and Kahneman, Daniel (1971), ‘Belief in the law of small numbers’, Psychological Bulletin, 76, 105-110.

UNLV Center for Gaming Research (2013), Macau gaming summary. Accessed online Feb 25, 2013:

Wagenaar, Willem A. and Keren, Gideon B. (1988), ‘Chance and luck are not the same’, Journal of Behavioral Decision Making, 1, 65-75.