Just-Dice.com : Invest in 1% House Edge Dice Game

[PacoMartin]

Each time the site profit goes above 1% of total wagered amount, some investors pull out, reducing the max bet on the site.  They're clearly thinking that it's bad to be invested when profits are above expectation, because they'll lose out during the inevitable return to 1%.  So they wait, and reinvest once the site returns to 1%.

This is a clear example of gambler's fallacy, and I've tried explaining it to some of them.  They listen, appear to understand, then repeat the same pattern next time the site goes above 1% profit.

And it's working for them.  The site does return to 1%, and they avoid the losses.

How do I convince them that it's a losing strategy when both their gut and their pocketbook tells them otherwise (so far)?

And do I want to?

I pulled this quote from day #17 of operations. Nakowa made his first big assault on day #24. It's an interesting question, since I get the feeling that the profit has been below 1% for most of the site's lifetime.

I am curious if there are some investors who are still trying to use this strategy? Possibly they look at winnings over the last few months, and try and time the market this  way.

[1713517428]

1713517428

[1713517428]

1713517428

[1713517428]

1713517428

[1713517428]

1713517428

[1713517428]

1713517428

[freedomno1]

Good game I had fun in the anniversary freeroll
Best of luck to the winners of this tourny its going to be a long one

[romerun]

crap I slept through the poker

[freedomno1]

crap I slept through the poker

There are four players still playing the last table is #16 if you want to see some extreme poker
2.5 Hours of Round so far quite impressive

[boumalo]

crap I slept through the poker

I didn't hear my clock!!

[PacoMartin]

What the Hell is going on? Profit from 1,8% to -0,08 in a short time. That just can't be luck...

This post is from day #24. In the first 23 days the site attracted 100K BTC in wagers and profit was just under 2K. Cold Wallet contained 36,466 BTC. In one day Nakowa took it to negative. Was this the first day he gambled? Did he play a little bit previously before taking profit negative? Was he an investor?

I see there was heavy play on day #25, #28, #30 and #32. Did he start to lose?

He said that...
05:26:11 (2548) <nakowa> if I want to grab the investment of this site all, I could do it. but I think dooglus is one of good guy in the bitcointalk.org, and I was just proving that I might have a point.
05:29:09 (2548) <nakowa> cici is another account I have.

It isn't a statistical anomaly.  He has a huge bankroll and thinks that the range from min bet to max bet is too high and allows players to successfully martingale if they have a big enough bankroll.

What do you think about that?  Martingale is a losing strategy, no matter what your limits, in my opinion.

I think it has nothing to do with the range from min to max. It's just somebody swinging a big bat.

[ranlo]

It isn't a statistical anomaly.  He has a huge bankroll and thinks that the range from min bet to max bet is too high and allows players to successfully martingale if they have a big enough bankroll.

What do you think about that?  Martingale is a losing strategy, no matter what your limits, in my opinion.

I think it has nothing to do with the range from min to max. It's just somebody swinging a big bat.

False. Case-in-point:

Min bet is 1 BTC, max bet is 10 BTC.
You lose 1x, that's 1 BTC so you bet 2 BTC. Lose and now you bet 4 BTC. Lose and you bet 8 BTC. The only way to break even at that point would be to either bet 16 BTC (and win) or bet 8 BTC 2x and win both in a row, which isn't a great chance (< 25%). Since you can't bet 16 due to the cap, your only choices are to take the loss and go on or to do the < 25% bet.

If, in the above scenario, the cap was 64 BTC, you could martingale through 3 more rounds before hitting the dilemma.

In other words, the min->max difference is a massive part in what determines how long a martingale strategy will last, as well as how successful it is. Someone with 50 trillion BTC, in the above scenario, would still be losing a ton of cash since they could never bet more than the 10 BTC cap regardless of what they have.

[PacoMartin]

In other words, the min->max difference is a massive part in what determines how long a martingale strategy will last, ...

No argument with this statement.

... as well as how successful it is.

The ability to make big bets allows you to create a large variance. It has nothing directly to do with Martingale.

You could be flat betting big bets, and just be on a lucky streak.

[dooglus]

This post is from day #24. In the first 23 days the site attracted 100K BTC in wagers and profit was just under 2K. Cold Wallet contained 36,466 BTC. In one day Nakowa took it to negative. Was this the first day he gambled? Did he play a little bit previously before taking profit negative? Was he an investor?

He was an investor from July 6th 2013.

The following 'milestones' are in date order, and only consider his first two accounts, nakowa (2548) and cici (9075):


His first bet was as 'nakowa' for 0 BTC #21500735 at 2013-07-12 10:21:04.


His first non-zero bet was for 0.01 BTC #23153894 as "cici" at 2013-07-13 11:22:13.

His first bet of 1 BTC or more as 'cici' was for 1.6 BTC #23156384 at 2013-07-13 11:23:40.

His first bet of 10 BTC or more as 'cici' was for 16 BTC #23181632 at 2013-07-13 11:41:37.

His first bet of 100 BTC or more as 'cici' was for 100 BTC #23249498 at 2013-07-13 12:20:19.

His first bet of 200 BTC or more as 'cici' was for 289 BTC #23430396 at 2013-07-13 14:19:31.

'cici' never made a bet of 300 BTC or more.


His first non-zero bet as 'nakowa' was for 0.01 BTC #23467388 at 2013-07-13 14:53:12.

His first bet of 1 BTC or more as 'nakowa' was for 2 BTC #23467629 at 2013-07-13 14:53:23.

His first bet of 10 BTC or more as 'nakowa' was for 10 BTC #23467767 at 2013-07-13 14:53:33.

His first bet of 100 BTC or more as 'nakowa' was for 160 BTC #23468783 at 2013-07-13 14:54:14.

His first bet of 200 BTC or more as 'nakowa' was for 200 BTC #23510066 at 2013-07-13 15:27:45.

His first bet of 300 BTC or more as 'nakowa' was for 303 BTC #23563297 at 2013-07-13 16:12:19.

'nakowa' never made a bet of 400 BTC or more.


As I remember it, 'cici' played first. He claimed it was a friend of his for a while, but I think later admitted it was really himself. I could be wrong about that; maybe it was a friend, or maybe it wasn't and he never admitted it.

I think 'cici' ended up losing a lot, then 'nakowa' played and recovered 'cici's losses.

[PacoMartin]

So you had all those three ugly events happen over the course of a few days.  

Talk about baptism in fire. I'm glad you made it through everything.

His first bet of 100 BTC or more as 'nakowa' was for 160 BTC #23468783 at 2013-07-13 14:54:14.
His first bet of 200 BTC or more as 'nakowa' was for 200 BTC #23510066 at 2013-07-13 15:27:45.
His first bet of 300 BTC or more as 'nakowa' was for 303 BTC #23563297 at 2013-07-13 16:12:19.

A Just-Dice customer is emailing me over and over asking for a refund.
Apparently he left his phone containing a funded Bitcoin wallet and a Just-Dice account in a restaurant.  Somebody found it, deposited his coins into his pre-existing Just-Dice account, and lost them.  Not all of his coins, just around 95% of them.
Now he wants a refund.

So last night the whale cashed out 1300 BTC, I processed it manually after checking the stats looked OK.  This morning I log in and see that the site has recovered 1300 BTC of its losses.  Yay!
But wait.  Sinking feeling in stomach...
Fuck.  I dun goofed.

Tom Breitling said he wanted to write his book after he sold the Golden Nugget casino, because he wanted people to know that owning a casino is not just sitting around having people throw money at you. It is incredible long days and huge risks that pushed their friendship to the brink.

[dooglus]

So you had all those three ugly events happen over the course of a few days.  

Talk about baptism in fire. I'm glad you made it through everything.

Tom Breitling said he wanted to write his book after he sold the Golden Nugget casino, because he wanted people to know that owning a casino is not just sitting around having people throw money at you. It is incredible long days and huge risks that pushed their friendship to the brink.

It gets easier, but I still can't stop the nagging doubt when someone has a lucky run that they must have found an exploit and are cheating.

We recently had a guy deposit 0.73 BTC and a few hours later withdraw 64 BTC. That's almost a 100x return, from playing at 66% over and over. Quite incredible, and a little worrying for me. Days later he lost it all back again playing the same strategy.

Each time this pattern repeats itself I get a little more comfortable with it, but that nagging worry never completely goes away.

When nakowa first started winning big I spoke to an experienced gambling site operator about it. He told me words to the effect of "welcome to running a casino; that's how it is; you'll never be able to stop worrying about people cheating you".

[ranlo]

So you had all those three ugly events happen over the course of a few days. 

Talk about baptism in fire. I'm glad you made it through everything.

Tom Breitling said he wanted to write his book after he sold the Golden Nugget casino, because he wanted people to know that owning a casino is not just sitting around having people throw money at you. It is incredible long days and huge risks that pushed their friendship to the brink.

It gets easier, but I still can't stop the nagging doubt when someone has a lucky run that they must have found an exploit and are cheating.

We recently had a guy deposit 0.73 BTC and a few hours later withdraw 64 BTC. That's almost a 100x return, from playing at 66% over and over. Quite incredible, and a little worrying for me. Days later he lost it all back again playing the same strategy.

Each time this pattern repeats itself I get a little more comfortable with it, but that nagging worry never completely goes away.

When nakowa first started winning big I spoke to an experienced gambling site operator about it. He told me words to the effect of "welcome to running a casino; that's how it is; you'll never be able to stop worrying about people cheating you".

This is sooooo true. Even B&M casinos go through the same thing. If someone starts winning multiple times on Craps, Roulette, etc. they start analyzing their behavior/bets and in a lot of cases end up kicking people out of their casino for winning too much by claiming they cheated somehow.

[PacoMartin]

When nakowa first started winning big I spoke to an experienced gambling site operator about it. He told me words to the effect of "welcome to running a casino; that's how it is; you'll never be able to stop worrying about people cheating you".

Steve Wynn used to quote something his father told him: “The minute you stop watching a person in gaming, money sticks in the hands of angels”.

In 1963, Steve Wynn's father died of complications from open heart surgery in Minneapolis, leaving $350,000 of gaming debts, shortly before Wynn graduated from Penn with a Bachelor of Arts degree in English. Wynn took over running the family's bingo operation in Maryland. His success allowed him to invest in a small stake for the Frontier Hotel and Casino in Las Vegas, where he and his wife, Elaine, moved in 1967. Between 1968 and 1972 he also owned and operated a wine and liquor importing company. He managed to parlay his profits from a land deal in 1971 (the deal involved Howard Hughes and Caesars Palace) into a controlling interest in the the Golden Nugget Las Vegas (which had been operating since 1946). I think he had to fire a third of the staff because they were cheating. It was so ingrained in the culture, that people would say I have to cheat, I don't make enough money.

But he also said that running on honest business helps in the long run. When he was in the wine and liquor business he had a good reputation. When he bought the casino one of his old customers called him up and said every day about a dozen of the employees from the casino come into my place to get drinks and divide up the chips they stole that day.

So I think your honest persona helped you with the 1300 BTC snafu. As near as I could tell about 95% of the investors were in favor of you simply rolling back the bets.

A friend of mine was dinged for double billing on his expense accounts for the military. He pleaded with the auditors saying it was just a clerical error on the part of his secretary, and if he was trying to cheat why would he submit paperwork that contradicted itself on one page. Basically the government changed procedures where instead of buying plane tickets on the credit card, they were bought through a central office. The secretary was unaware of the change, and listed the price of the plane tickets on the expense forms. But the auditors would not let him pay the mistake (with interest). Instead they had to drag him through the whole process so he would be denounced by name on the Senate floor. He not only had to pay back the money, but he was suspended from work for two weeks.

[PacoMartin]

This is sooooo true. Even B&M casinos go through the same thing. If someone starts winning multiple times on Craps, Roulette, etc. they start analyzing their behavior/bets and in a lot of cases end up kicking people out of their casino for winning too much by claiming they cheated somehow.

This very short paper was written to try and help people understand the mathematics of streaks (winning or losing). They are widely misunderstood, and people make many mistakes.
https://just-dice.com/Just%20Dice%20Streak%20Bet.pdf

Did you know that if you ask a group of people to flip a coin 200 times and write down the results, and ask another group to simply fake the data, you can usually pull out the fake ones with a high degree of reliability?

[SebastianJu]

So I think your honest persona helped you with the 1300 BTC snafu. As near as I could tell about 95% of the investors were in favor of you simply rolling back the bets.

Yeah... dooglus is one of the view bitcoin entrepreneurs i really trust. Thats why i upped his trustrating a bit some minutes ago. I dont see a risk coming from dooglus side, though the amount of coins hold a risk from outside unfortunately.
Anyway... im happy seeing a good example. Im so tired of all these guys like kslaughter, whose perfectionism ran a business on the wall, mark kapelles who wasnt able to handle a business of that size and and and... and... the list looks endless...

[dooglus]

Steve Wynn used to quote something his father told him: “The minute you stop watching a person in gaming, money sticks in the hands of angels”.

In 1963, Steve Wynn's father died of complications from open heart surgery in Minneapolis, leaving $350,000 of gaming debts, shortly before Wynn graduated from Penn with a Bachelor of Arts degree in English. Wynn took over running the family's bingo operation in Maryland. His success allowed him to invest in a small stake for the Frontier Hotel and Casino in Las Vegas, where he and his wife, Elaine, moved in 1967. Between 1968 and 1972 he also owned and operated a wine and liquor importing company. He managed to parlay his profits from a land deal in 1971 (the deal involved Howard Hughes and Caesars Palace) into a controlling interest in the the Golden Nugget Las Vegas (which had been operating since 1946). I think he had to fire a third of the staff because they were cheating. It was so ingrained in the culture, that people would say I have to cheat, I don't make enough money.

You can watch Steve Wynn recount the story here:

https://www.youtube.com/watch?v=s_THiMy4CEU

So I think your honest persona helped you with the 1300 BTC snafu. As near as I could tell about 95% of the investors were in favor of you simply rolling back the bets.

I think in the early days a lot of the investors were concerned that I wouldn't make enough from running the site to make it worth my while. As well as encouraging me to roll back the 1300 BTC snafu they also told me that only taking 1% of profits as commission was too little.

It's in their interest to make sure that it's in my interest to run an honest game, odd as that sounds.

[dooglus]

and and and... and... the list looks endless...

Did you see this list?

The 1300 BTC snafu is the 26th biggest "incident" on the list.

[21pilot]

and and and... and... the list looks endless...

Did you see this list?

The 1300 BTC snafu is the 26th biggest "incident" on the list.

would you handle a similar situation today the same as you did back then retrospectively?
(I´m not sure if rolling back the bets is the right move in this situation   )

[dooglus]

and and and... and... the list looks endless...

Did you see this list?

The 1300 BTC snafu is the 26th biggest "incident" on the list.

would you handle a similar situation today the same as you did back then retrospectively?
(I´m not sure if rolling back the bets is the right move in this situation   )

I think I did the right thing.  I would have done it more quickly, and been clearer about it.  For a few days I was thinking I had to eat the loss myself.

Also, in retrospect, I would have debited the account before making the manual payout.

[PacoMartin]

I think in the early days a lot of the investors were concerned that I wouldn't make enough from running the site to make it worth my while. As well as encouraging me to roll back the 1300 BTC snafu they also told me that only taking 1% of profits as commission was too little.

It's in their interest to make sure that it's in my interest to run an honest game, odd as that sounds.

I saw all those comments.The assumption is that they will walk away from the contract because they have so little to lose. But they must have trusted you because all three incidents at once would make less levelheaded people run. I'm sure as they were looking at a dipping profit margin, it was hard to give up an additional 1300 BTC, even knowing that it shouldn't have been there in the first place.

Who takes 1% commission?  Even the federal government doesn't trust people who ask for too small of a profit margin. We would give demerit points to proposals where the commission was too small.


I also liked the response to the people who assumed that you were nakowa. Basically your defenders said that dooglus isn't that dumb. If he were going to steal, he wouldn't do it by blatantly assaulting the bank.