Why Swoopo is Flawed

I know a lot about probability theory. When I first learned about Swoopo, I quickly found the problem with it...

If 40 people 'bid' on a laptop which only 1 person wins (for say $40 instead of $400), statistically, you (the bidder on Swoopo) will only win 1 in 40 'auctions'. So once people figure out that they have a 1/40 chance, they might as well bet on a horse, or even play roulette - which is generous by comparison.

And here's the really funny bit... Once people realise they only win 1 in 40 times, they're going to ditch Swoopo forever.

Thus, Swoopo is a Ponzi scheme, because it relies on more suckers coming along just as everyone before them realises they've only won 1 in 40 auctions, and quits Swoopo.