I have a question on Probability. With two dices, which each have six sides people are making duels with these dices. the winner is the one who rolls the highest. the chances are of a 50% win as it is a duel between two and the terms are the same, but the person taking bets keeps a 10% commision. What is the best way to bet in this type of scenario? i'll give you an illustration: i bet 100,000 and i win so the host gives me 180,000 which is 2x the original bet -10% out of the outcome. what is the best way to make a long term profit? Currently i am using martingale system, but i lost in a loosing streak by doing the following: i bet 200,000 and lost. then i bet 400,000 and lost then i bet 900,000 and lost and finaly i bet 2,000,000 and won. but the pay out was 3,600,000 which was by 200,000 lower than the total of my bets.
What system should I use?
To maximize your long-term profit, you should use Kelly gambling, which says you should bet on a wager proportional to the edge you get from the odds. The intuitive form of the formula is
$$ f^{*} = \frac{\text{expected net winnings}}{\text{net winnings if you win}} \! $$
If the odds are even (ie. your scenario, but without the commision), the Kelly criterion says not to bet at all. The addition of a commision for the casino gives a negative result, which means you'll make a loss in the long-term, whatever your strategy.
So the short answer: playing this game is a losing proposition whatever your strategy. If it weren't, casinos wouldn't stay in business very long.
The martingale system only works if there is no ceiling to the amount you can bet (remember that the bets increase exponentially, and there is only so much money in the world). But you should make sure that each bet covers your existing losses, if you win, and makes a small profit.