If a Cowboy or Indian becomes a bandit, they are given bounties automatically for doing a wider variety of things than the other sub factions. Additionally, all bounties count as double when placed on them. However, they get guaranteed loot on kills and have a chance to get double loot. If a Cowboy Bandit or Indian Bandit proves to be too unruly for the faction by having a total amount of $1000 placed on them across all bounties they have collected while being in the bandit sub faction, they are kicked out of their faction and become part of the main Bandit faction.
Players in the Bandit faction have similar penalties to bandit Cowboys and Indians, but to a larger degree. They automatically get bounties simply for playing, and all bounties collected from killing them count as triple. This means they are huge, HUGE targets for many players to hunt down. However, they get guaranteed DOUBLE loot on kills, with a chance for TRIPLE loot.