Can someone summarize why the bet went through? Was the bet supposed to go through?
The bet went through because the site was using the Kelly criterion to decide how much of its bankroll to risk. The Kelly criterion tells it to risk 35.3% of its bankroll when playing the 'red' line (with 121x max payout).
https://www.moneypot.com/bets/18530298 shows <1% house edge. But risking tens of bitcoins at 1% edge is crazy, so I assumed it shouldn't have gone through 
People are familiar with dice site style betting, where there are only two outcomes (win/lose). In that case Kelly tells us that the percentage of the bankroll to risk is the same as the percentage house edge.
It's quite different for plinko games where there are a range of outcomes. In that case Kelly tells us to risk more than (house edge)% of the bankroll. See my most recent two charts. Risking 35% hits the peak of those charts. Risking only 1% gets you far lower expected log growth.
Thanks for clearing it up.
Makes perfect sense now.