I'm only agreeing with this idea, if this will be made available only for events.
If we release another full-time mini-game, we would only split our already small playerbase (those who play minigames). We don't have enough players to keep this minigame alive.
If this would be made available only for events, people would be more likely to join. Also this method doesn't take players from other minigames.
As far as prizes and rewards go, I agree with Otto: this game should act as a cash sink. The entry fee wouldn't be large (like 100-200k) and the winner will receive most of pot, also 2nd and 3rd place will get their payments back.
Any other prizes would temporarily keep the game active, but as soon as those items are bought, the game would die out. So I'd keep this only for events and only cash rewards (taken from entry fee pot). Definitely no item and xp rewards.