There types of sites are very popular in Finland, there have been like 10 services coming after the first one. And it's very good business, even for a such little market as Finland.
It's pretty easy to create bots for these type of sites. Couple of my friends created bot and got something like 30k from the process. Of course the sites try to limit the usage of bots.
How does the bot AI work? Look for a lull in the bid rates? It seems like it would be hard to know when other people aren't also sitting there waiting to pounce on the auction.
I remember seeing a penny auction for an iMac sell for 236 dollars. At .60 a bid, that's $14,160 in revenue, or 12k profit. Absolute insanity. That being said, I think they've hit a critical mass. What will probably end up happening is that those that buy bids realize that they're buying overpriced lotto tickets, and bore of the game. But there will always be more fools to the fire.
As for the parent post, people will get sick of it after spending $12,000 to win an iMac - weeks after signing up. If the house is so greedy to take 12,000, they can't expect this to happen forever. Casinos probably know that you can only take so much for the house pot.
I registered an account to see what else is visible in the bid window. The interesting part for me was their "Tiered packages" that takes advantage of customers by playing off their assumptions that buying more bids at one time would be cheaper. If you do the math, no matter how much you buy at one time bids are always $.60 each.
It's not like that. It's just a store where if you get lucky, you get it for a dollar, but it could take months to get lucky. A dollar store is not a gamble, other than gambling the item you bought is worth slightly more than in another store.
http://www.pennyauctiontraffic.com/