The role of the house in Pai Kau betting -- beware!

The Banker is one of the players. He retains this role (if willing) for many deals until another player gets the chance (by rotation).

The player who is Banker puts a sum of money, say B, in front of him before the tiles are dealt. Each of the 7 gamblers also place their bets.

The order of events is as follows. If you are a player, read carefully!

• The tiles, which are like big domino-tiles in appearance, are dealt, sorted into front and back duos by all players and placed back onto the table face down.
• The Banker's front and back duos are then exposed by the croupier. ("Exposed" by slamming them on the table, face up. The gamblers either groan or yell in delight. The noise made by slamming the tiles is a vital ritual to the Chinese gamblers in Macau. Twice I saw tiles break!)
• The croupier then exposes the tiles of each gambler in turn, from 1 to 7. (This is done quietly!)
• Any gambler who has losing tiles, in comparison with the banker, has his money moved into the centre of the table. It is not moved into the Banker's pile of money at this stage.
• Gamblers who have drawn with the Banker are given their money back.
• The house then takes 4% of the central pool.
• There remains the issue of those who have won. In turn, they are paid out at even money (less 4% which the croupier takes). The payouts come initially from the central pool, but if this has no money, the payout comes from the Banker's amount B.

You can see the problem looming, particularly for a gambler with winning tiles sitting in seat 7. What if the Banker's amount B is depleted? Will he get paid?

Here the "house guarantee" is envoked. If gambler n wins and his bet x does not exceed "the house threshold" C, then he will be fully paid (less the 4%), either in the regular way -- from the central pool or from the Banker's B -- or by the house as a last resort. If x > C and the Banker is broke, then a winning gambler receives only C (less 4%) paid by the house.

One would think that the gamblers might keep their own bets within the threshold C if Banker's B is not very large. No, not always! Sometimes people bet without much regard for the magnitude of B or C.

I saw one gambler who bet $HK30,000 on a deal in position 3 when the house threshold C was only $HK3,000. The Banker drew poor tiles and his B of about $HK15,000 was cleaned out by players in positions 1 and 2. The man in position 3 had winning tiles but was paid only $3,000 . Yet, had he lost, he would have lost all of his $30,000.

Now we turn to what the Banker's profit is, if the central pool is still in surplus after all winning gamblers have been paid out.

• If this surplus does not exceed B, then all of it is given to the Banker.
• If it exceeds B, the Banker is paid only B.

Who takes the rest of the pool's surplus, you may ask? The house, of course!

Is this fair compensation for their role in underwriting the Banker? I don't know, but it seemed from observation that the house was onto a "nice little earner" (as Arthur Daley would say) because of the irrationality of gamblers' betting. It seemed that the casino took more money via this mechanism (nett of any underwriting payouts) than by the 4% commissions, but I cannot be sure.

A few other games in Macau, for example the novices' game called "Marjong Pai Kau", have the same betting protocol.

Footnote: A few years ago, a syndicate came to Macau and outsmarted the casino for a while before getting tossed out. When one of their number became Banker, he put forward a fairly small bank B. In addition, he made bad sorting decisions purposely, thereby setting up losses for himself and gains for all his friends. On many deals, he lost all of his Bank and so the house had to pay his friends $C each. In nett terms, the syndicate gained from the casino.

Nowadays, the croupiers will intervene if a Banker tries to make a poor sort of his tiles.