This is getting rejected:
"I think $500 is rather cheap for making something that they want to be a trademark (if you don't think so I suggest read up on trademarks- you should anyway if planning on entering this comp), and while they have a .org domain (supposed to mean non-profit) google returns nothing about "Electronic Games Australia".
Assuming post 2 is accurate it would be nice to know who it is that is trying to own IP they aren't paying for (sounds familiar somehow)- seems to me like owning the winning design they pay $500 for is far more reasonable than owning everything enetered.
They even have in their mission statement "protect their intellectual property" (of indie game developers). Perhaps you people could start with this comp?
Without more details I'd avoid this comp if I was an artist.