The original version of Pai Gow used special dominos and dice. It's said to be a rather complicated game, played slow enough to serve as a social event and is rarely seen in gaming houses outside of Asia.
The modern, Westernized version is played with a deck of 53 cards -- regular deck plus a Joker -- and uses poker-like hands for ranking. It's still a complex game but the changes make it more approachable, as indicated by its success in casinos throughout the world. And it's still a rather slow game with showdowns often resulting in ties. This serves as a fine counterbalance to the faster playing casino fare, and it allows a player with a modest stake to last longer at the table than would be possible with other games.
Pai Gow is often a multi-player game where the deal rotates around the table much like regular Poker. One of the traditional rules is that the dealer also acts as banker for that hand. In online play all of this is simplified to the player-vs-house model.
Bets are placed and the player receives seven cards. From these seven cards the player forms two hands: a two-card hand called the "low" or "front" hand; a five-card hand called the "high" or "back" hand. The goal is to beat the dealer on both hands. The back hand is ranked as in Poker with the exception that A-2-3-4-5 is the second-highest straight beating K-Q-J-10-9. The front hand is singles or a pair, with A-A being the highest.
There are a few additional rules. First, your front hand should not beat your back. If it does, this is called a "foul" and both hands lose. Second, the Joker can be used as a wild card to complete a Straight, a Flush, a Straight Flush or a Royal Flush. Otherwise it is treated as an Ace.
Betting in most online games is very simple in that you make a single opening bet and that is the end of it. In some Pai Gow games there are separate bets for the front and back hands, but this is unusual in on-line play.
If both hands lose to the dealer, you lose your bet. If both hands win, you win even money. If one hand wins and the other loses, it's a push. If your hands are the same as the dealer's, called "copies", the dealer wins. Obviously that’s an attraction of playing dealer/banker in multi-player games. In such games, you minimize your losses by betting low when you are a player and being dealer/banker whenever possible.
If the player wins, the house takes a 5% commission: you get $4.75 of a $5 winning bet.
There are a number of issues related to the multi-player games when it comes to the dealer/banker question. Keep in mind that none of this applies to typical single-player on-line play.
Dealer/Banker: In multi-player Pai Gow games the bank rotates from person to person, where a player may pass the deal if they choose. If you want to deal you must have enough money on the table to broker all other bets made. If you are uncomfortable with the full risk of banking, another player may co-bank with you as dealer and the two of you will split the wins and losses. The house will bank if no player is willing to do it. If a player is banking, the dealer can be a player, wagering as the banker asks. If a player is the banker then the dealer will first compare their own hands to that of the banker and make the appropriate payments. Then the dealer will take the banker's cards and compare them to the other players, using the banker's money.
All wins in Pai Gow are at even money, less the house's 5% commission.