Full credit for the idea and original execution of this contest (including the original write-ups, which I've adapted here) goes to GunMage; credit for its continued survival goes to FastFalcon05.
HOW IT WORKS
1. Newcomers start with $1000.
2. Each match, you'll be given a percentage spread between the two participating characters on which you can bet your money. If you guess correctly, you increase your money reserves by the amount you bet; if you guess incorrectly, you lose your bet amount.
3. When betting on spreads, you must explicitly state which characters you're betting on and how much you are betting (either a percentage of your money or an exact numerical value will do here; adding conditions based on your money total or future match results is also permitted).
So, all of the following are acceptable:
$1000 on Link vs. Ganondorf (-8).
50% on Cloud Strife/Sephiroth.
MAX on Link/Ganondorf > 54%.
If Mario/Bowser beat the spread, $1000 on Link/Ganondorf; otherwise, MAX on Link/Ganondorf.
4. All bets must be in before 12:00AM EST (or 9:00PM PST), which should be roughly when each match starts. No bets will be accepted for a match after that match begins.
5. You may bet up to the entire sum of your money reserves. If you have less than $500, you may bet up to $500.
6. If you bet and lose more money than you have, you will go into debt (equal to the amount you lost that cannot be covered by your money reserves). Your total debt is kept track of throughout the contest and is deducted from your final total at the end of the contest. Note that it is now impossible for your money reserves to drop below $0.
7. Justification for your wager is no longer rewarded, but still encouraged.
8. The overall winner of Spread Betting: Rivalry Rumble will win a (maximum $60) game of their choosing.
Full rules and updates can be found here, at the Spread Betting Discussion Topic:
http://www.gamefaqs.com/boards/8-gamefaqs-contests/60829670
To win:
Link/Ganondorf > 54%
Cloud Strife/Sephiroth > 46%
Good luck!