I'm by no means convinced allowing investors to take on more than 1% risk is a good thing.

The problem I see is that if they can take on significant risk per bet then it removes all incentive for anyone to actually play the game.  Why would someone take on the role of player (with the odds against them) if they can expose their capital rapidly but with the odds in their favour?

Investment MUST be slow and steady profit - to force gamblers into taking on the player role and accepting the bad odds.