He is totally right.
You should have lower limits for the max bet in order to reduce the variance. If he had to bet 1 btc every time, and not 250 btc in 1 bet, he would have lost 2.5 btc (approximately), but he had a 49.5% chance to win 250 btc
...
Also, if someone has 10 times the invested amount of money, martingale will increase his probability to win. Still, he will have more chance to lose it all before he could double up, but if he just needs to make + 5 %, martingale will ensure him a higher chance.
You should have lower limits for the max bet in order to reduce the variance. If he had to bet 1 btc every time, and not 250 btc in 1 bet, he would have lost 2.5 btc (approximately), but he had a 49.5% chance to win 250 btc
...Also, if someone has 10 times the invested amount of money, martingale will increase his probability to win. Still, he will have more chance to lose it all before he could double up, but if he just needs to make + 5 %, martingale will ensure him a higher chance.
martingale gives you a higher chance to win if you have a bigger bankroll, but it also increases the amount you lose if you lose everything, so it is completely fair.
The 1% max bet doesn't really stop everything because you could just split the bet into 2, and now you have a 2% max bet. Someone could cleat the full 26k site bankroll with about 3Mil by just always betting at 98% until the site is bankrupt.