Your math is a bit off, and there is a better method.
You need to multiply your bet by 8 on a loss if you want to end up with a net +initial_bet. If you multiply by 7, you'll end up with +0 after 1 loss, -175 after 2 losses, -1400 after 3 losses, etc. If you multiply your bet by 8, you'll end up with +25 after 1 loss, +25 after 2 losses, +25 after 3 losses, etc.
There's a way to make money slightly faster. Instead of just multiplying the previous bet by 8, multiply it by 8 and add the initial bet. That way, even if you lose 3 games and win the 4th, it'll be as if you won all 4 games. Using 25g as the initial bet, you would now make 300g/hour with the same chance of wiping out.
In both these cases tho, your chances of losing just got multiplied by 8 because your fourth bet goes way over 10,000g. You would need to bet around 17g/round (under the new method, 19.5 from the old) to keep that 1/4096ish chance of losing (assuming you can bet up to 10000g on 7 slimes). This would give you around 204g/hour with the new method (201 with the old).
Last edited by sentythee; 10-20-2009 at 10:42 PM.