the problem I see with this bet is that even the chance is 1 in ~30k the user can win it in his first bet before the 29,999 losing bets. or what do I miss here?
What you're missing is that on the other hand the same guy could make 99,999 losing bets in a row and never hit the 121x payout.
It's a gamble, and nobody is saying the investors always win.
By using the Kelly criterion the house is optimising the expected returns for the investors. That doesn't mean the investors won't be making a loss at times.
yes the player could make 99,999 losing bets in a row but as it is a bet of 1 in ~30k he could still win the outer with his first few bets or even more than once in his first few bets. why should a casino take such a high and risky gamble? IMO a casino should never take such a high risk gamble with a possibility to get wiped out in one bet. as I posted before I don't know any land based or online casino beside MP that is taking such a dangerous risk.
to me it looks like that this high risk KC handling is only for plinko or does MP have other games with such high risk payouts? maybe the previous MP owner could answer this question.