A fellow game designer (larienna) has pointed out to me that Yu-Gi-Oh! has a serious flaw (design-wise): the player with the strongest creature in the deck will win.
Secondly there is absolutly no reason to have creatures level 1-3 in your deck. Only level 4 creatures - since all of these cost nothing to put in play.
The betting system proposed (as in each chip is a creature) corrects the Yu-Gi-Oh! flaws. How? Well first of all, having the strongest creature does not mean you can summon the MOST of this creature. Typically the stronger the creature, the more rare it will be and therefore the less you may summon of it. But that doesn't mean you can't BLUFF with a pet rock... ;)
A strong creature can be defeated by a mob of munchkins (or fairies - if you prefer)! Again this because the conflict resolution mechanism takes into account the strength of the creature and the number of creatures summoned.
Mathematically I THINK it is possible to average the number of creatures and their strength to determine a KEY value. That KEY value should indicate, based on the strength of a creature, how many copies of that creature may be summoned.
Is someone good with math, to help dig out some sort of formula (I'm pretty sure there is a relationship - and math that will work with it)?
Well he was right about not having any creatures less than 4. He didn't say that the other player ALWAYS wins - you could beat the opponent before he gets to play his most powerful card.
He only said, that in most cases when that card is played, that player will win the dual.