Fixed Expense
The term fixed expense sounds to me like a misnomer. The nature of the expense sounds more like a *variable cost, and earning could have been more clear if the word profit was used. Also, I think we should consider the "Assuming the optimal betting: m = 2F" part. My best guess is that m = 2F only because the variable cost was half of the hourly rate. Maybe that blows away some fog.
Aside from a minor confuse-block, what MathProf asserts sounds correct if and only if Kelly betting that are used in BJ does assume all proceeds from the game is being used as increase in the initial capital just like compound interest. Assuming the variable cost is mandatory, and the unit of production being hour, it only makes sense to subtract the hourly expense right out of hourly revenue.
Conversely, a RoR calculated in this manner could be decreased once this variable cost can be decreased or eliminated altogether. Candide would be happy to hear this!
On the other hand, if this cost was a mandatory one, food for instance, the situation may become a little tricky. Hypothetically speaking, if a player knew exactly what amount of action grants a comped meal, and realized that he could raise his action by raising his betting unit by x%, he may be able to hit the g-spot that enables him to 1)increase win rate, 2)reduce expense, and therefore 3)reduce RoR. I haven't tried graphing or anything for that matter yet, so I don't know anything for sure. It would be lovely if someone more able than I could help me with this.
It would also be interesting to calculate expected value of # of hands that a back-counter gets to play in an hour along with the SD of # of hands played in an hour. This would provide a more clear insight into how much the variable cost can be expected on a per hand basis as well as variable cost per initial wager amount for that matter.
I've been looking into the original Kelly formula, and I haven't found my way out of the maze, so I won't know this for sure until I see a daylight. Maybe I should consult help from my math professor.
*variable cost - in total, variable cost varies directly proportional to changes in the level of activity. I just added this in case I was being unclear.