If we're talking about a single match, sure. But if more matches are to take place, people will probably start seeing potential in the contestants. So, even if they lose against opponent A, they might be more likely to win opponent B. And as Frim said, this makes people enjoy the act of gambling itself. Their faith in a contestant will be reflected by their bets, and such a faith can only be built up on someone who has participated in more matches—even in ones they lost—than the new guy who came to fill in for the other who died. Also, if a better is really confident in a contestant and they die, they might lose a lot of motivation and choose to not come back anymore.