That said, this game is flawed as the game operator has an easy way of winning the game with a very high probability. By investing 201 BTC, it can bet on 0.01, 0.02, 0.03, …, 1.98, 1.99, 2.00, and collect every bets including its own.

Another player could do that too, but would have to make sure that other players have bet at least 7.22 BTC. Otherwise, the 3% taken by the bet operator would be larger than what could be gained, and the winning player will lose money.

Even if a player choses to take that risk, it is always possible for the bet operator to top that, unless this is done at the very last moment, with the risk of having bets sent past the 199k block lost if they were not included in the last block.

So I'm not saying that the game operator will cheat, but that the 3% fees are much more than fees, in that they change the game dynamic and allow the operator to get everyone else bets if it choses to do so. The operator may be honest and let a player win, but there is no guarantee it won't abuse its dominant position there.

Am I right?