I like that we can place bets on who's going to win, but I think we need to do something to encourage this activity. For this reason, I think "the house" should exist. Let me explain.
I've been playing around with a few ideas, but I'm sure someone on the forum will have a better one. I don't think players should all necessarily be betting against "the house" in the traditional casino sense... I just think system should make a conservative wager in response to a player placing a bet. i.e. if SarsAI were in the lobby making small wagers as an individual.
This would theoretically encourage more gambling, because more money would be in the pot. If lots of players bet, "the house" would make a conservative, mathematically derived bet in response to each bet. In this way, if there are a lot of bets placed, "the house" will also place a number of bets... likely across many competitors. With the system making bets, players will vie for the pot more often. And if you're the only one betting, at least you have someone to bet against.
I haven't figured out the math to do this, but odds considered, I'm guessing the house would be close to breaking even... despite the fact that there would be a lot more gold in the average pot. Since "the house" would be diversifying its investment in response to player bets, it would likely have a share in the winnings most of the time.
Any thoughts on the programming logic or math that could make this work? I'm about to pass out and can't think straight.