Right, I think they operated pretty much like they said they would, but the way it was setup caused the thing to fizzle out really quick.

Another unrelated idea: setup a site based on a progressive betting scheme like martingale. First depositor puts in 1, second depositor puts in 2. 1.1 goes to the first depositor, 0.9 goes to a jackpot, and 0.1 goes to the house. At each round the required deposit doubles, while the probability of winning the jackpot increases. "Jackpot" is probably a bad term because you really don't want to win it. It probably doesn't pay you back fully. Rather, it ends the round, pays you something, and starts the next deposit at 1. Hope I'm making any sense with this. Probably needs a lot of tweaking. May be able to make something better based on labourchere. I guess the main thrust of the idea is that because ponzi schemes require increasing numbers or amounts of deposits, you simply enforce this as part of the game.