How does investing in the house bank work?
When gamblers bet against the house it must have a pool of funds available to pay from when the gambler wins. This pool of funds is known as the house bank. The bigger the house bank is the higher the bet limits can be as a bigger house bank can afford to make bigger payouts. Normally the house bank comes from the site operator themselves, but in the crypto gambling investment model anyone can invest in the house bank. When a gambler wins, his payout comes from the house bank and all investors lose money. When a gambler loses, his money goes into the house bank and all investors make money. Given there is a mathematical advantage to the house, the house bank and all investments in it should increase over time. How much of the gamblers’ losses you get depends on what % of the house bank you have provided. If you have provided 0.3% of the house bank you will get 0.3% of the profits or losses. Well nearly; the operator takes a % of the house profit, typically 10%. This is called a 10% commission on investors’ profits. So if you invest 0.3% of the house bank you will make 0.27% of the house profit with 0.03% going to the operator.How much can you make?
To work out how much you can expect to make on a crypto gambling investment platform you need to multiply the investor’s edge by the number of times the house bank is turned over per year then apply to compound. That will give you the expected annual return.expected annual return = investors edge x turnovers per year
investors edge = house edge – commision
turnovers per year = 365 / turnover length in days
For example, a 1% house edge with a 0.1% commission to the site gives us a 0.9% investor’s edge. If the bank takes 30 days to turn over that is 12 turnovers per year. That would give us an expected annual return before compounding of 10.8%
investors edge 1% – 0.1% = 0.9% turnovers per year 365 / 30 = 12 expected return before compounding 0.9% x 12 = 10.8%
Then use a compound interest calculator by plugging in the expected edge before compounding (10.8% in this example) as the “annual interest rate” and set the number of turnovers per year (12 in this example) as the # in “interest to compounded # times per year“. That will give you the expected annual return after compounding which in this case makes 11.13%. House bank turnover is how long it takes an amount equal to the house back to be bet. To get this figure you have to check the site’s stats and work it out manually. We calculated this and other key stats for all major operators on our dice investment comparison.