1. This does rely on reasonable time synchronization. If people are worried about timestamp cheating, we can always increase the verification time, but there's a tradeoff there. If a block is orphaned and a transaction moves into another block, the bet will be resolved based on the new block.

2. The %2 was a bug. I just released version 1.3 to fix that, and the Windows client will be updated shortly. I also updated the technical specification to reflect what actually happens in the code. (number i) was a typo, and I had forgotten to mention the factor of 100 is simply to put the standard random uniform variable into percentage terms (since Chancecoin saves the chance of winning as a percentage as well).

3. I can write up the formal proof once the bitcoinj wallet gets off the ground. I apologize for taking a while to answer questions recently. Venetian and I have been pounding the code treadmill pretty hard with this new wallet software.

Magician