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.
This was discussed in the local chat. The situation where MP risks 1k BTC confronting the players + 99k BTC on CP for a total of 100k at 1% is overall worse (for everyone) than the situation where MP risks 1k BTC confronting the players at 100% while holding on to the rest in safety.
The alternative implementation where this is only allowed to large investors is probably safer for the minnows, but it will probably be strongly protested as "unfair" and "fiat-like". The implementation where any minnow is allowed to act as a big fish with a stern warning is probably more in the spirit of Bitcoin. There will certainly be nuts risking 100% of their balance at 100%, but they won't likely last.
I considered the other implementation but rejected it as you'd end up with the perverse situation of players running martingales on the investment side where they actually work. That's the problem with allowing minnows to act like big fish - you can't allow them to risk ANY portion of their balance without also allowing them to change it frequently to make it +EV.
I can't see a 'fair' way to allow different degrees of risk whilst preventing people using it to gamble (and in the process removing benefit from all other investors as well as allowing them to sit at the wrong side of the table for what they're doing).