It’s a scam when the house takes $1 from that $100 each time. These unlicensed internet gambling halls most certainly take their cut, whatever that amount is.
It's only a scam if they don't disclose that. If the house brought the two people together I'd say it's fair as services rendered. I don't get mad when a bar charges more than the base cost of the alcohol.
> now everyone but the house is guaranteed to lose.
Gambling is about more than making money. Most gamblers do not expect to win, they do it because its entertaining. Paying $1 for the opportunity to participate in the coin flip is something many people are happy to do. Negative EV does not equal losing because you forgot to include the entertainment value.
Scams involve deception. There is no deception in a business that is upfront about taking a fee to match gamblers.
