I understand the max bet part, but what if a player bets 1BTC and wins (way below a max bet). Do the 0.25% and 1% guy participate equally based on portion of the bankroll or does the 1% person get 4X more than the 0.25% investor?
People who run 100% kelly get 4 times the action of people running 25% kelly, yes. By definition, pretty much.
A says "I'm willing to risk up to 0.25 BTC". B says "I'm willing to risk up to 1 BTC". We sum those two, and present to the gambler "the site is willing to risk up to 1.25 BTC".
If the gambler comes back and says to the site "I'll take 50% of what you're offering", we say to each investor "he's taking 50% of your offer".
I don't see how any other way would be fair.
No, because low risk investors are just as okay as high risk investors for lower bets. They're okay with it.
But, they're not okay with betting more than 0.25% in one shot. That is the definition of kelly.
No - Kelly in this context relates to what the INVESTOR risks. And the low-risk is NOT risking more than 0.25% of his bank-roll in any one shot. Where in dooglus' proposal does the low-risk bet over 0.25% of his bank-roll?
Think of it in terms of a single bet with only investors.
Investor A (low risk) says : I'm willing to risk up to 0.25 BTC on this bet.
Investor B (high risk) says : I'm willing to risk up to 1 BTC on this bet.
The house says to Gambler : "You can bet up to 1.25 BTC - how much would you like to bet"?
Without knowing the answer what is the fair way to share exposure? To me (and to dooglus) the obvious answer is A gets 20% of the action, B gets 80% - in ratio to what they're willing to risk on that single bet.
You seem to believe A is allowed to say "I'm willing to risk up to 0.25 BTC but I want half of all action until my money is all in play".
So why isn't B allowed to say "Fuck you - I'll take the first 1 BTC and you can go without unless he bets more than that?"
If one can make stupid claims for preferential treatment relative to what they're risking, why can't the other?
Remember that the money is exposed to risk BEFORE the bet is made - it's all exposed to accepting action (and displayed as such in the MAX WIN area). If you want a bigger share of each bet then offer to expose more of your money per bet (either by a higher risk % or by depositing more).