Easily fixed - only allow people to change their risk level once per day.  Then people can't game it - and have to pick the risk level they'll take for ALL action.  The house doesn't need backing for the small bets - so if you want a share of those you should also have to take a similar part of the big action.  People could still divest/reinvest when whales were around - but there's no stopping that whilst giving people control of their money.  And the people who routinely divested when he bet before at 1% risk will likely do the same at .25% risk if a whale starts winning again - so it's not a new problem.