They pay it out through paypal www.dietbet.com/how-it-works
It's only $5, so it's not a terrible loss/win, however it ends up- at least in my opinion. But agreed, everyone has varying ideas of what's realistic and 1% per week may be too aggressive, but I like a challenge to see what I'm capable of.
And it's probably not right for everyone- but the premise is like an office biggest loser style competition- minus the office- which is nothing terribly new.
The way I look at it, it'll be nice to get a few extra dollars to motivate me to keep doing what I'm already doing!