I don't have a problem with the "house" keeping a portion of the bracket money. Where I have a problem is with the "house" keeping the money AND not doing a very good job of running brackets.
Here's one for you...
A tournament association I belong to uses the Ebonite tournament software, which also supports brackets. However, the tournament director didn't want to run brackets, so another bowler is doing it.
He is doing a pretty poor job of it. I have offered to help him (for no $$), because I know the software pretty well, but he so far has refused the help. Last tournament, he screwed up with the data entry, and had to use the other ocmputer to get the bracket results, and then screwed up on the payout - I won one, and he tried to pay me for second place.
These guys - until they really know what they're doing, seems to me they shouldn't keep a cut...