Magic Dice 2% or 4% house edge
It looks lo me like Magic Dice has a 4% house edge unlike what is advertised.
When I make a 1 Steem bet at 50% win percentage I win 0.96 Steem.
To me that is a 4% edge.
A 2% edge would pay 0.98.
No?
It looks lo me like Magic Dice has a 4% house edge unlike what is advertised.
When I make a 1 Steem bet at 50% win percentage I win 0.96 Steem.
To me that is a 4% edge.
A 2% edge would pay 0.98.
No?
On a 50% bet, without house edge you would win 2x.
With a house edge of 2%, the multiplier is 1.96x ( 2 * 0.98 = 1.96).
For a 1% bet, without house edge you would win 100x.
With a house edge of 2%, the multiplier is 98x( 100 * 0.98 = 98).
You can verify the correct house edge for all bets like this.
The house edge isn't included in the win chance like some people falsely assume. It's included in the multiplier/payout.
So the 2% is on amount bet not the amount won.
2% house edge applies to the payout.
You can verify the house edge/payout with other platforms that have the same 2% house edge like https://eosbet.io/dice or https://endless.game/dice.
It goes by win percent chance 50 is a 49% win chance up to 95 which is a 94% win chance so what they are promoting is the percent chance. But yeah its kind of weird.
I agree MagicDice is calculating the win percentage that goes to the House, so its 51% : 49% that is a 2% percent winning difference.
On top to the 2% winning edge percentage they also make profits by paying out only 96% of the amount that was placed in bets.
For example day 1. 100K in Bets with 1000 games played, 2% Winning from 1000 games is 20 Games House Edge these 20 games had an average bet size of 100 Steem (1000games x 100 Steem = 100K Bet Volume)
20 games x 100Steem = 2000 Steem from House winnings
Plus the games that got payed out only 96%. Thats 98 000 Steem × 0.04 = 3600 Steem
Overall gross profits = 2000 + 3920 = 5920 Steem = 5.92% of the Bet Volume.
It would be interesting to see if the actual Volume numbers match with that calculation.
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I had exactly the same doubt, although for now I don´t really care about the numbers, I just want the project to succeed and help STEEM take the next step.
But, it makes sense with your explanation. Thank you for that!
I have same doubts and masterthematrix did not quite clear that off!
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@magicdice
Posted using Partiko Android
This magic dice formula is correct. In the 50/50 case you have two possible outcomes:
both of them have a probability of 0.5. The expected steem you have after playing is thus s = 0.5 * 0 + 0.5 * 1.96 = 0.98
So you loose 2% of your input per game or a 2% edge for them.
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