Would you agree that this is a harder problem than say casino and gambling on the blockchain? There are great use cases for improving trust with smart contracts and ledgers that prevent the house from cheating or running off with the money.
> The smart contracts have to be in someone's control.
They don't _have_ to be. Someone has to deploy the smart contract, but that doesn't necessarily mean that they get any privileged access to alter/use the smart contract after deployment. That's where a lot of the beauty of smart contract enabled blockchains comes from in my opinion.
Here's an article on an idea very similar to theirs, with sample code: https://www.blunderingcode.com/gamble-channels-fast-verifiab...