I'm sure they apply the 0.8% house edge before the bet... right? So in the 51/100 bets- which are losers they take 1% for the Jackpot. And they pay 0.1% to referrals. Your math is just wrong in regards to a house edge. If I said I had a 1% house edge and gave 95% of losing bets to my Mom... My house edge is 1%.
Well, maybe they are doing this way, putting the "house edge" on the flipping instead on the returned amount (I really doubt they are doing this, we can't call this the "house edge" on this situation, and they really need to explain this on the site). But your math isn't right also, they're not giving the jackpot to their Mom, the jackpot means that amount will be back to the players sooner or later. So this value should be deduced from the "house edge".
So in the situation above we have (in my understanding):
0.8% "house edge" means that in 1000 plays 496 will win and 504 will lose. so 504-496 will give us 8 plays to the house (0.8%)
from all the 504 loses they are putting 5.04 to the jackpot - this leaves the house with 0.296% house edge.
in the best situation there will be 0% players referred in the site and in the worst situation there will be 99%
so this will put house edge about 0.197% and 0.296%. Very low in my opinion.
Besides that we found a positive house edge in the situation above, I still won't play in a site with that low house edge and not provably fair.
This is simply you not reading the rules. The max jackpot is 400x your bet.
i forgot about that, tks for clarifying, but still doesn't make sense, see below.