I'm the owner of the site and i noticed a few misconceptions you have:
That player who has 729 points, he's currently an admin on one of the premium servers (it has a lot of griefers which is why hes playing so much). He's on vacation from school which is why he has so many. Once school starts, it will drop off.
You can add your own servers to the server list with the "Personalized Server List". But these servers you add only give 1 point every 15 minutes. if you host your own servers, you can sign up for the server operator prize (which is 5 times more than the player prize), and after you refer 50 players (over any time period) all your servers get upgraded to Premium for free. The reason why there are not other Premium servers (aside from the FTW servers) is because those server operators have not yet referred players. It's actually not that hard to refer players. I have two 20 slot garrys mod servers that see around 4000 unique players each month and i get around 2 to 4 sign ups per day because of my in-game advertising for the contest.
You can also gain more points by referring friends who are playing at the same time as you (in any game and on any server). Info on this is at
https://www.capturetheprize.com/main.php?r=faq/view&id=32
The winner is not determined by the most number of points. Points just increase odds, having lots of them doesn't guarantee winning.
It's completely free. You dont pay anything. Everything is funded by advertisements.
Only some games require Steam (see below). But you do need Steam to sign up to the contest.
Games That Use Steam:
America's Army 3, Counter-Strike: Global Offensive, Counter-Strike: Source, Counter-Strike, Day of Defeat: Source, Day of Defeat, Garrys Mod, Half Life 2: Deathmatch, Killing Floor, Natural Selection 2, Team Fortress 2, All Orangebox Mods (eg. PVK II, NMRIH, Neotokyo, etc.), All GoldSRC Mods (Natural Selection, Sven Coop, TFC, etc.)
If you have further questions, feel free to ask.
P.S. Tomorrow i will fix up the website to make these things more clear.