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Risk Analysis of Baccarat Non-Negotiable Chip Programs: Confidence Intervals by Eliot Jacobson, Ph.D.

Non-negotiable (NN) rolling chip programs are used by casinos to award cash back rebates to their high-rollers for their play. The rebate is based on returning a fixed percent of all NN chips purchased and lost by the player. In this post, I covered the basic mathematics of NN programs, including computing the effective house edge for each NN chip used. I also showed how to compute the T-Win for a player based on the exact number of NNs the player used. In this post, I presented a method of risk analysis called the z-Score. This analysis is backwards looking; how likely was a result? The present post considers a forward-looking method of risk analysis called confidence intervals.

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