You give some information about what you want.
You offer a prize for the best logo ($512 in this case.)
Anyone can submit a logo.
You pick your favorite, pay the prize money, and the logo is yours to use or not use as you see fit.
Even if you get no logos you like you're only out the prize money, which is a lot cheaper than a talented designer would cost. It's great for a business that needs a cheap logo, not so great for designers making a living from logo design.
I don't know who owns rights for non-winning logos.
All participating designers should read the terms for the site they're using (obviously) but in general they retain all rights to their own work if not chosen. The most common exception is for promotional purposes, i.e. if the site wants to run a campaign they can use your image without requiring any notification.
You give some information about what you want. You offer a prize for the best logo ($512 in this case.) Anyone can submit a logo. You pick your favorite, pay the prize money, and the logo is yours to use or not use as you see fit.
Even if you get no logos you like you're only out the prize money, which is a lot cheaper than a talented designer would cost. It's great for a business that needs a cheap logo, not so great for designers making a living from logo design.
I don't know who owns rights for non-winning logos.