I agree. Splitting the rewards would be beneficial for multiple people, but the chances do go up which is why I don't understand what you meant by the chances still being the same.
Example : 1 winner/100 contestants has lower chances when compared to 5 winners/100 contestants.
I don't think it always good. If the prize too low (cause the splitting), few people will think they don't need to join the contest because even they become the winner, the price is not really worth it. Imagine if all people think so, there will be no contestant as they think it's wasting time.