I fail to see how the house edge get reduced, even if it was not the topic here.
Assume that 10 people have deposited bitcoin into a casino. All deposits have been credit before confirmation.
All 10 people start to gamble after their deposit their were credited. 5 of them lose and 5 of them win.
Those 5 losers double-spend the UTXOs deposited into the casino. The 5 winners wait for their transaction to confirmed and withdraw all their balance.
This is how the casino can lose money.