Post
Topic
Board Gambling
Re: bustabit v2 – No commission on investors & dilution fee lowered to 1%
by
RHavar
on 05/03/2018, 23:58:52 UTC
It turns out that on average investors are 16.8x offsite-leveraged which is likely too much for lots of them, but that's their call.

It's probably not a big deal for JD, but I think that can be potentially harmful. Once the bankroll is "big enough" (which JD's clearly is) a new investor's investment isn't going to make the site any more attractive or bring in any volume (i.e. investor gains are going to be zero-sum). When investors see that the max-bets the site accept are a tiny fraction of the kelly, they'll be incentivized to increase their leverage -- effectively taking (expected) money from conservative investors (which will push them into doing the same thing).

And now you end up with a potentially pretty unstable bankroll, as the best strategy for the highly-leveraged investors it to divest their position when ever they see a whale (which ironically is what a big bankroll is for) or have a very significant risk of a whale busting them.

But as I said, probably not a big deal for JD as your bankroll is sufficiently big that even with instability (or a big margin call) it'll have no problem supporting the players you have.