There were a number of them last year at JavaOne, including one hosted by the java.net Robotics community, using the simplified GreenFoot programming environment to code TrackBots. We found it was a pretty hard sell when people have travelled so far and paid so much for registration and having so much else to attend to that week; attendees really weren't willing to spend more than a few minutes coding. The best "fun setting" programming competition I've ever seen is the now-defunct MacHack, where attendees would just code all day and night, maybe go see some sessions, but mostly work at open tables in the ballroom in preparation for Friday night's hacks show, where they'd show off their stuff. Prizes were insubstantial -- it was more about showing off crazy, clever, insane stuff to your peers. So anyways, that's an example of this kind of thing working, with the caveats that a) the contest was kind of the point of the entire conference, b) "winning" was not the point.