How do we interpret this graph? It looks like SatoshiDICE is consistently beating expectations. Over time shouldn't the actual revenue be very close to the red line (house edge)? Why is it so much higher? And why is it that in two particular months there was a large jump in the activity (i.e. change in slope)? Is this an indicator of botting?
The red and black lines are pretty close together (61k vs 66k). Notice that zero is a few miles off the bottom of the graph, and the graph is auto-scaled to make the best use of space. House profits are about 5k higher than they should be, or less than 10% higher than they should be. A few big losses will correct for that. If you look at
the graph for January you'll see the red and black lines cross each other at least 17 times, meaning the house was doing exactly as expected. In general the slope of the two lines should roughly match each other. The
law of large numbers says that the two lines will get arbitrarily close to each other in the long run, but we're not at the "long run" yet, when a single bet can change the total house profits by more than 1%.
The whale lost big in the beginning of February, which put the black line well above the red line, where it has stayed since.
December and January saw a lot of betting activity from one user, which made the profit graph jump up and down erratically and made the red line go steeper than usual. It was almost certainly a bot, just because I doubt if a person would have the stamina to keep up such a level of play for so long. Whether it was a "house bot" or a real player it's impossible to prove. Erik says it's a real player and I believe him.
