The question as posed is: What is the largest bet that cannot be made with chips worth $7.00$ and $9.00?$ To prove my conjecture, I am supposed to use both forms of induction.
After research, I found this quantity to be the Frobenius number, $g(a_1,a_2),$ if $\gcd(a_1,a_2)=1$. Through experimentation, or a formula, one finds this 'largest' bet to $47.$
Thus our problem can be stated as follows:
Show that every integer $n\geq48$ can be written $$n=7a+9b$$ for $a,b\in\mathbb{Z}^+\cup\{0\}$.
My attempt via induction:
Let $S:=\{7a+9b:7a+9b\geq48\text{ and }\ a,b\in\mathbb{Z}^+\cup\{0\}\}$. First, we confirm that $48\in S$. Take $a=3$ and $b=3$ to see $48\in S$.
Now assume for some $n>48 $ that it can be written $$n=7a+9b$$ for positive (or zero) integers and thus $n\in S$. We need to show $n+1\in S.$ Thus $$n=7a+9b\in S\implies$$ $$n+1=7a+9b+1=7a+9b+4(7)-3(9)=7(a+4)+9(b-3)\in S$$
But here is where I get confused. In the book the author justifies confusingly that $a+4$ and $b-3$ are always positive (or zero) integers, and argues that this process shows you can always bet $1$ dollar more by adding four $7$ dollar chips and simultaneously taking away three $9$ dollar chips, but how can we always be sure there's enough $9$ dollar chips to take away, or, how can we be sure $a+4$ and $b-3$ are always positive?
I'm not sure about the strong induction case either.
Here is the process I'm trying to reproduce 
The part I am failing to understand and rigorously accept is from the paragraph "Let S be..." and down.