Well, makes the most sense if Hiding takes over as 2nd place.
Also, I would like to suggest to raise the price for first place. Maybe double it. Pay 1/2 of it guranteed for the win, and the 2nd half after the person did decently host their challenge according to the rules (judged all entries, and so on).
If the 1st person doesnt want to host the challenge, his substitute gets at least the reward for hosting a challenge. If the winner doesnt want to host the challenge, the right goes to the 2nd ranked by default, then the 3rd ranked and finally if none of the winners wants to, the CM can pick a volunteer.
Right now hosting a challenge is much more work than participating in one, and goes largely unrewarded (which may partly contributes to rather unmotivated judges).