DietBet keeps a cut of the gross pot to cover our expenses, which include financial transaction costs for both the initial bet and the payout, weight-verification staff, customer service, and technology support. Because DietBet's fees are taken out of the gross pot before paying out the winners, players who do not win do not incur any fees. The current fee to play is 10-25% of the payout depending on the amount of the initial bet (not the pot amount).
UPDATED: December 5, 2013.
New "No Lose Guarantee"
This guarantee ensures that if you win your dietbet, you won't lose money. Most winners make money (about 1.5 to 2x on average) but in the event that your game has an unusually high percentage of winners, we'll forfeit our cut in order to ensure that nobody loses money. So the worst case scenario is that you'll end up losing weight for free, which is still a big win. The only exception to this case would be a charity game. Our charity games do not have a 'No Lose Guarantee' as we want to donate the most money possible directly to the selected charity.