"Baccarat is a game of chance between "the player" and "the banker." You bet on which of the two hands dealt (the banker's or the player's) you think will have a value closest to 9. Do not assume that, because you are "playing" baccarat, you must bet on "the player." You are always free to bet on either the banker or the player. You can also choose to bet on a tie. Baccarat is played with one standard deck of cards.

In baccarat, two hands of two cards each are dealt on the table: the banker's hand and the player's hand. You simply bet on which hand you think will have a value closer to 9. According to the rules of baccarat, face cards and 10s have a value of 0; aces are worth 1; all other cards are worth their face value. If the value of the two cards totals 10 or more, then the first digit of the total is discarded. For example, if a 9 and a 5 are showing, the 1 is eliminated and the value becomes 4, not 14.

The baccarat rules dictate that, in some situations, a third card may be dealt. There is a series of conditions for when the player and/or the banker must stand or hit. These are compulsory rules that do not really affect the betters. When the dust settles and the final baccarat cards are dealt, the hand closest to 9 wins."

Source: http://www.wildjack.com/baccarat-rules.php

Player Hand: when first 2 cards total:

1,2,3,4,5,10	Draws a card
6,7	Stands
8,9	Natural - stands

Banker Hand:

First two cards total:	Draws when player's third card is:	Stands when player's third card is:
3	1,2,3,4,5,6,7,9,10	8
4	2,3,4,5,6,7	1,8,9,10
5	4,5,6,7	1,2,3,8,9,10
6	6,7	1,2,3,4,5,8,9,10
7	Stands
8,0	Natural - stands
0,1,2	Always draws

Source: http://entertainment.howstuffworks.com/how-to-play-baccarat1.htm