Changing the payout: I don't like this because it doesn't stop the same 3 guys from winning every week.
playing to win back your entry fee and tell your friends "I got 4th" doesn't excite anyone.
It won't stop people from quitting if they had no chance to win. It's not about the entry fee.
As you said, nobody's really in it for the money.
No, you gotta change it so it's not a predictable winner.
Predictability = boring = nobody wants to play.
Instead of handicaps, you can do something like the chip tourney.
There are actually 2 fun formats I've seen that add a lot of random luck
to it, which helps guarantee the same people don't win every week.
Format 1
Get a deck of cards, set aside 2 of each card, lay them down randomly on the table.
Everyone picks up a card. The two jacks play each other, the two 9's play each other,
the 2 6's play each other, and so on. Random draw.
They can play 1 rack or a very short race (race to 2).
Losers report their loss at the counter and wait for all the races to finish.
Then the card process is repeated.
After 3 losses, a player is out.
Keep repeating the card thing, using a joker as needed for byes
(when there's an odd number of players).
Last man standing is the winner.
Format 2
Similar idea, but you are immediately assigned to play whoever is available.
Winners stay at their same table, which kind of helps you stay in stroke.
Losers don't have to wait for their next match.
It's maybe a little less fair because it rewards slower players,
the guys who finish faster have more opportunities to lose.
But I've seen this format done with one-rack matches, and that sort of
limits how much someone can stall.