Doog's explanation is correct except that we reduce / don't take every commission. When the players is referred, those 0.05% will goes to the referrer. This ensure that for every bet the commission will not be higher than 10% of the H.E. Our next step is to create a thorough explanation about this on the site (as well as Variable H.E. system).

First we have to separate our role as investor and operator:

• As an investor, the site takes 10% of H.E. as commission / ref payments. It is only 10% of the expected profit, so it should be ok.
• As an operator, we remove ourselves from variance, we focus on the wagering amount (which is good).

Those ref payments are taken from the role as an investor, directly from the bankroll. So, as an operator, we are very safe, we shouldn't worry about variance.

In a way, the system is actually similar with taking fee from winning bets. Remember that when investing in a gambling business, our profit from one bet is used to cover the loss of another bet, we only wish that total profit is higher than total loss.

We take 10% of the house edge of every bet directly from the bankroll as commission. If the bet was made by a player who was referred, we give 20% of that 10% to the person who referred him.

In other words, your commission that you charge investors is 10% of (house edge)% of the amount wagered, rather than 10% of actual profit, and the referral fees you pay at 2% of (house edge)% of the amount wagered - so if every player has been referred, the referral fees are exactly one fifth of the commission.

We will check on that again, this copy feature is quite tricky to be implemented in cross-browser environment.