Hey guys! @magicdice recently announced they are giving away Magic Credits, shares to their online casino which will start distributing dividends starting from February! You can read more about it here.

Basically, there are 7 billion Magic Credits and you earn 200 for each STEEM wagered! This halves for every 5% distributed.

If you're interested in earning some Magic Credits, click here!
Referral link

However, just how much are these "Magic Credits" worth?

Some Starting Assumptions:

1. Magic Dice has been operational for ~2 months, let's say 3 to be conservative
2. Let's assume the 140k STEEM @magicdice has in the account are all winnings from house edge, minus referral bonuses etc
3. Let's assume the 140k STEEM has been evenly split between the last 3 months (very unlikely, but adding this to be conservative)
4. Let's assume each month @magicdice profit grows by 10%, in my opinion this is an underestimate by a long-shot as they introduce more games like lotteries, crash, blackjack, roulette and much more! Games like Endless Dice have volumes of around 7.4 million EOS monthly, which statistically earns them around 148,000 EOS monthly, which roughly equates to 1.3 million STEEM profit monthly!
5. Investors are looking for 10% ROI (which is quite standard for volatile investments)

Some calculations

• Using assumptions 3 and 4, I have constructed a predicted profit for the year of 2019
  
• Let's round it up to 1,000,000 STEEM profit per year
• If we divide the total number of tokens by 1 million, and the profit per year by 1 million, we can see that it takes around 7,000 tokens to earn 1 Steem per year.
• Looking at assumption 5, you can expect your 7,000 tokens to be worth 10 STEEM
• You can earn 7,000 tokens by wagering 35 Steem, at a 2% house edge statistically you're expected to lose 0.7 STEEM, that means you're expected returns is over 1500% (14.29 times your original investment)
• Looking at assumption 4 and 5 together, we can see that this is very conservative. If @magicdice reaches one tenth of the volume of Endless Dice, we're looking at at least ~2200% profitability on our Magic Credits.

At what point of distribution do you start making a loss?

The above calculations are done assuming it's 200 Magic Credits per 1 STEEM wagered, however this is halved every 5% that's distributed. We can see that we break even at 200/14.29 Magic Credits per STEEM wagered, which is achieved after halving 4 times (12.5 Magic Credits per STEEM wagered).

Therefore, you're technically statistically earning by playing until 20% of the Magic Credits have been distributed. However, once that happens I'll likely make another post analyzing the future of the platform to decide whether it's statistically worth playing more!

This is not financial advice