The role of the house in Pai Kau betting is not very clear, warns Professor R. Cowan at the University of Sydney. The house seems to be profiting not only from the 4% rake.

Popular online casino game Pai Gow Poker stems from a classical Chinese gambling game called Pai Kau. While Pai Gow Poker is played with cards, Pai Kau is played with tiles, much like mahjong. It can get pretty wild, with players and dealers making a lot of noise.

Casinos always keep an edge in the games they spread, that’s what pays the staff’s salaries and all other costs involved in running a big business. But the role of the house in Pai Kau betting may be a bit more involved than just scooping in the rake.

Math Professor R. Cowan at the University of Sydney gives a fascinating account of his visit to a Chinese casino in Macau. He describes how the game of Pai Kau is played, with players shouting and yelling and the dealer slamming tiles onto the table with such force that they occasionally break.

In Pai Kau, one player takes on the role as a banker against the rest of the players. The winners are paid out of his money, but of course he profits from the players who lose.

Even though a player acts as a bank in the hand, the house is still very much involved. First of all, they rake 4% out of each pot. Secondly, they guarantee the winnings of the players.

Meaning, if the player who is the banker cannot pay all winning players, the house steps in and secures their winnings. But only up to a certain fixed amount, called the house guarantee!

If a winning player has placed a big bet that the banker cannot meet, and if the win exceeds the house guarantee, he will not receive the whole amount that he won in that hand.

It’s this fact that has led Cowan to raise a warning finger regarding the role of the house in Pai Kau betting. It would seem that the house makes money not only from the official rake.

So next time you go to Macau to gamble, have a great time – but beware of the house in Pai Kau!