Ah, good point.  I am sure snackman realized that distinction and was not trying to ripoff the other parimutuel bettors... (where's the sarcmark on this thing?)

Regardless of what you think of bitbet's behavior, this snackman guy is an asshole.  Is there a tag for that?

Mtgox price hits 750  (Bet is decided)
Nov. 18, 2013  21:25 GMT
http://api.bitcoincharts.com/v1/trades.csv?symbol=mtgoxUSD&start=1384809900


Nov. 18, 2013  21:42 GMT  (Snackman tries to rip off other bettors)
https://blockchain.info/tx/2af75fb4e50a14bf247575bf426615d01f9d6db4d88dc0668d27c88259f68691

Trying to bilk a parimutuel bet after the result is known is very scummy.

You can't consider it's "ruined when it's ruined".  If the bankroll got down to 5 BTC then the max bet would be 1% of that = 0.05 BTC.  It never goes to 0, but when it drops low enough the site is out of business.  A whale with double the stack as house is almost the same as whale with infinite stack.

What you guys don't quite seem to understand:  A 1% max bet is INSANE for the house.  You just suffered a 25% drawdown.  With a 1% max bet that is going to happen often at these bankroll levels.

Could you walk into any casino in the world and bet 1% of their bankroll on a spin of the roulette wheel?  Not even close.  And smaller real world casinos have still been cleaned out.

If you want a long term business in JD, you need to lower the max or be fully prepared to get wiped.  If you are just looking for a fast buck, well, good luck!

Some simple risk of ruin math introduced here.

Assumptions:
- The whales have enough capital to try and break the bank without going broke.
- JD is considered "ruined" when the bankroll drops from 30,000 BTC to 5,000 BTC.  Considering the panic already seen among investors, this is a very conservative estimate.

With a 1% max bet the risk of ruin is surprisingly high:  18.2%

With a 0.5% max bet it drops drastically to: 3.3%

With a 0.25% max bet it is miniscule: 0.11%

Also, Kelly criterion does apply for the best long-term ROI, but with kelly betting you can never go broke.  Just eventually the max bet would get into the satoshis and nobody would play.

Fwiw, I had a similar experience with coinbase and they fixed it.  I went through their "level 1" buying experience and had to wait a week for my coins.  After a week, when the price had risen 20%, they canceled my order for fraud purposes.

But support did reply in two days to my angry response and they fulfilled the original order.  So there is hope.