Maintaining game pace, ensuring dealer expertise and the availability of “smart” gaming tables are all important elements if the Macau casino market is to see a successful expansion of a baccarat ‘insurance bet’, a product that sparks some interest among players while also boosting house advantage, say several industry experts spoken to by GGRAsia.
Guaranteeing dealers had sufficient training to handle the complexity of ‘baccarat insurance’ rules and payouts would be important if the option were to have a chance of gaining popularity, observed the experts.
Baccarat insurance bets have been offered recently at the “Supreme” high-limit rooms at MGM Macau and MGM Cotai, according to a Citigroup January survey of Macau premium-table bets.
GGRAsia approached MGM China Holdings Ltd, operator of the two properties; and the local regulator, the Gaming Inspection and Coordination Bureau, for comment on the insurance-bet topic, but had not received a reply from either, by the time this story went online.
A baccarat insurance bet option is “currently offered in Resorts World Sentosa in Singapore, some of the Manila integrated resorts” as well as “cruises in the Southeast Asia region”, said gaming consultant Alidad Tash, managing director of 2NT8 Ltd, in comments to GGRAsia.
The Gambling Regulatory Authority of Singapore defines commission- and non-commission baccarat insurance as: “A bet being offered to a player at fixed odds in accordance with [a] baccarat insurance pay table before either the player or banker (or both) hand(s) goes into the third card as per the baccarat table of play.”
Ryan Ho Hong Wai, a scholar and specialist in gaming business teaching at Macao Polytechnic University, told GGRAsia: “Premium players, due to the high stakes involved, frequently employ advanced strategies to maximise their potential winnings and mitigate possible losses. The availability of the insurance bet option allows them to hedge their bets.”
Mr Ho and former Macau junket boss Luiz Lam Kai Kuong said that baccarat insurance betting was not a novelty in Macau, but can slow down play, due to some complexity in managing it properly.
“Golden Group and SJM had in 2010…got regulatory approval to offer an insurance bet option for baccarat play in their VIP gaming,” said Mr Lam, referring first to a former Macau junket brand, and second to SJM Holdings Ltd, one of that city’s six gaming operators.
Game speed, house advantage
What Mr Lam termed the “fun elements” of this baccarat betting choice did appeal to some VIP gaming patrons – including ones from mainland China – but the resulting slower game made it a “niche” product within the city’s gaming venues.
Mr Tash said that given the bet option’s tendency to slow play, it was only really feasible for consideration in VIP betting or the premium, high-stakes end of the mass market.
The “high house advantage” it offers could make it appealing on the operator side, noted Mr Tash and Mr Ho.
Mr Ho said: “The house advantage for baccarat with insurance varies depending on the specific rules and payout structures in place. In general, casinos can have a mathematical advantage exceeding 14 percent, which is favourable for their profitability.”
But the scholar also noted: “Given that the house advantage for baccarat insurance tends to be higher compared to traditional bets in the game, some players may come to realise that the insurance bet is not an optimal option in the long run.”
Mr Ho added: “The decision to introduce baccarat with insurance option in… casinos is… contingent on several factors, including dealer proficiency and the availability of smart tables.”
The latter was a reference to digital aids to managing table payments and chip inventory, such as use of radio frequency identification (RFID) technology.
Gaming scholar Mr Ho added: “The insurance rules and payout structures can be complex and prone to errors, particularly for novice dealers. Therefore, operators must assess if they have the required infrastructure, like RFID-enabled tables or advanced systems, to handle the intricacies of the insurance bet option effectively.”
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