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.
The thing is here we are talking about a big prize and even if we split that to 2-5 winners each of them would take a considerable amount of money. Anyway, at the end I think it's still better to have only one winner because this way we'll have more competition between players knowing the prize is so huge and they have something to fight for.