You keep talking about this purse as the division winner being the final payout of that $4,800... They paid $1,000 of it to the winner of the division. From there they qualify for the next level tournament (cities, regionals, etc, depending on how the LO does it in that area). Once you win your division you don't pay the fee's in the high level tournaments.
Maybe the LO in that area does take a huge portion of the money paid in, maybe they don't. Until you know how many teams they have, how many and how much they get paid in higher level tournaments, how many they send to Vegas, and how much each team gets in travel assistance, you can't say they are taking $3,800 out of the purse as you're only seeing a tiny portion of the purse. The purse is all the payouts in all the various forms for the entire session, not just that one divisions winner.
And don't just look at the "cash" prize. Think of the cost for plaques, t-shirts, etc for teams that won different awards that may be in that division. There is the cost of the patches that people win for different accomplishments.
So, when you come back with the breakdown of how all the money is spent and what % goes back to the players when you factor in the entire session/year you can continue to *****. As you only have _ONE_ number out of many and using that to make your assumptions you're just showing ignorance.
Brian