Why is it even a less fair bet when the “house” takes a cut of each dollar bet? So is gambling irrational?

A mathematically “fair bet” is one in which a gambler bets, say, $100 for a 10 percent chance to win $1000 ($100=.10x$1000). Assuming diminishing marginal utility of dollars, explain why this is not a fair bet in terms of utility. Why is it even a less fair bet when the “house” takes a cut of each dollar bet? So is gambling irrational?