B.H.
We did this in our neighborhood and had so much fun (I came in 2nd place!). What we did was set up a facebook page where we could offer encouragement and tips and announce weekly winners. We picked one person to email our weekly weigh-in numbers to (rather than meet weekly to weigh-in, too tough to get everyone together).
Everyone paid (I think) $20 to enter and then weekly prizes to the "Biggest Loser" were given out. Then at the 6-month mark the winner got the pot. There were weekly challenges for mostly exercise type things, but I think if you incorporated diet type challenges (more water, more veggies/fruit) that would be fun too.
It's a great way to lose weight! It holds you accountable not only to yourself, but to a group. Also, it really got my competitive spirit going.
Also, when people dropped out (and they inevitably do) it just increased the pot for those who stuck with it!
So fun and a great idea!