i will still stay with my theory a site with 0% house edge would profit enough for owner to make money and pay bills to keep it open
Your theory is wrong. If the house edge is 0%, the house's expected profit is also 0. They will have winning days and losing days, but the expectation is zero.
There was
a thread about this a year or two ago. Kluge was talking about running a -EV game:
why not offer a casino where the player has an edge per play (maybe even significant), but still has the cards stacked against them simply by gambling psychology?
I talked him out of it by running simulations showing how even though most players would bust if they were greedy, a few lucky players would win more than they lost and have their profits soar. The two (most players losing a little, a few players winning a lot) cancel each other out, and leave the house with an expected zero profit:
Conclusion:
House ended up very slightly (each game and set, the house seemed likely to lose, but rarely won huge) - nothing abnormal. Theory's definitely bunk [...]
whenever you start using a so called ''strategy'' you risk to lose everything easily. You dont need the casino to have infinite funds just put a max bet limit (shouldnt be too big at first) After you make some profit you can start increasing the limit a little bit.
It doesn't matter how you play. You expect to lose (house edge) * (amount wagered). If the house edge is 0%, you expect to break even.
In the end, as the house, you still expect to make 0 profits at 0% house edge. NO MATTER HOW THE PLAYERS BET.
Thats not how it works, players betting with martingale, say starting with 0.01, the casino having a 1 BTC max bet. You can bet 7 times in a row without reaching the max bet (The chances of loosing 7 times in a row at 50% are 0.78125 % or 1 in 128, meaning that
every 128 bets the player expects to lose their max bet and expects to win 64 bets since thats the average martingale sequence. The math is simple, if you win 64 bets, 64 x 0.01 = 0.64, when you bust you are loosing, 0.01 + 0.02 + 0.04 + 0.08 + 0.16 + 0.32 + 0.64 = 1.27 bitcoins meaning a profit of -0.63 each time you are using martingale.
a1choi is right. Your calculation is incorrect. The problem is with the bolded part. You don't expect to hit 7 losses in a row after 2^7 = 128 rolls but after (2^8)-1 = 254 rolls.
To see this, consider how many coin tosses it takes to get 3 heads in a row. Try it a few times. You probably think the average will be 2^3 = 8 tosses, but it isn't - it's 14.
Here's a fixed version (I'll fix just the math, not the language):
Thats not how it works, players betting with martingale, say starting with 0.01, the casino having a 1 BTC max bet. You can bet 7 times in a row without reaching the max bet (The chances of loosing 7 times in a row at 50% are 0.78125 % or 1 in 128, meaning that every 128 martingale sequences the player expects to lose their max bet once and expects to win the sequence 127 times. The math is simple, if you win 127 sequences, 127 x 0.01 = 1.27, when you bust you are loosing, 0.01 + 0.02 + 0.04 + 0.08 + 0.16 + 0.32 + 0.64 = 1.27 bitcoins meaning an expected profit of 0.00 each time you are using martingale.
I hope that helps.
I dont know if you can make a poll in a thread, i think you need to make another thread with the poll, anyways there is no need for one since maths tell you that a 0% house edge casino would still profit as explained above using martingale strategy as an example.
I hope you can see now that you're wrong. It should be intuitively obvious that a 0% edge leads to an expected profit of 0. I do agree that voting isn't the way to decide mathematical issues of course.
That is exactly what we offer. We offer 0% fees on all sport bets:
https://www.fairlay.com/event/category/soccer/ Since we don't take a position but instead user bet against user the average user has an expected value of 0. If your bets are better than the average user your bets will make money in the long run.
So how do you fund the site? If you don't take a position and don't collect fees, what's the business model? I'm guessing the "zero fees" thing is a promotion to attract business and once things pick up you're start charging fees. Or are you funded by advertising?
