Cool idea of treasure hunting but why is it that they have to announce the player's location when it is about to get the treasure? Now, thinking that with the system that selling lives in order to play the game, and millions of possible participants on this game, this is a good money grab option for the mod creator. There will be sure a huge blood bath here fighting for that "treasure" thus, good sales for the lives requirement to play the game.
Cause if they didn't, the game would be quite boring now won't it? Plus, it's treasure hunting, so if you actually found the treasure before anyone else did, and you didn't even have the chance to fight anyone, it kinda kills the fun of fighting against others no? Plus, Minecraft is mainly centered around playing around, so even if money is involved, having fun is still a must.
As for the money part, It's kinda difficult for the mod creator as well, since he did create the mod, and additionally, rewards are given to those whom wins. The mod creator would probably have close to zero if he gives out a huge pot depending on the number of players and deposits the mod gets.