The thing is they don't. I think most people at HN have been introduced to Swoopo based on articles analyzing just how much of a ripoff it is by running some numbers.

To the first-time visitor it is not clear at all that they are basically playing a lottery with a very low payout. Calling it an auction is misleading because in an auction you only pay if you place the winning bid. This is more like a raffle, but it's not labeled as such.