it's all about reputation. all games are made public online. all payouts are displayed on the website. if things went array for any reason it would be public knowledge very quickly and thus the end of the site.
I like the idea of provably random, but I think I would change it in a subtle way: I would pull the least relevant digits from a list of stocks (or currencies), sum them, then hash them. The key would be to do this after the bets are placed. Since any amount of jitter on the least significant digit for any of the stocks completely changes the outcome, and since there are already massive third parties interested in the exact nature of these numbers, you would have a very random, very provable flip. You wouldn't need a changing seed because the bets would come in and then everyone would wait a second or two and then the result would be provably fair.
The problem with your provably random method is that it is still possible for the house to get a slight edge. Since the server seed is random, you could regenerate it hundreds of thousands of times so that the house has a slight edge for the first two or three flips (assuming there are lots of people playing on the same deck, it gets wayyyy easier if it is one deck per person). You don't need that much of an edge to dominate your competition. An edge of 2 or 3% doubles your revenue; which would 4x or 6x your profit, since margins are usually thin for gambling sites.
The problem with your provably random method is that it is still possible for the house to get a slight edge. Since the server seed is random, you could regenerate it hundreds of thousands of times so that the house has a slight edge for the first two or three flips (assuming there are lots of people playing on the same deck, it gets wayyyy easier if it is one deck per person). You don't need that much of an edge to dominate your competition. An edge of 2 or 3% doubles your revenue; which would 4x or 6x your profit, since margins are usually thin for gambling sites.