No. If 60% of people pick Player X, his value goes down. This is parimutuel betting. You don't want significant overlap if you can help it; how would you beat the crowd otherwise?
You find outliers and apply a pricing model that finds the best gaps. The information is incredibly valuable. Take it from someone who did this for a living at one point.
This isn't quite parimutuel, because in that system all the bet totals are published in nearly-real-time. If you wait until 1 MTP to place your bet you have a very good idea what the odds will be. It isn't obvious to me why the sports gambling sites need to keep this information secret, other than to create exploitable situations like those described in TFA.
They don't need to keep the information secret. They could operate just like pool betting if they wanted to. The problem comes when the information is kept private but insiders can see it. This would be equally bad for pari-mutuel betting.
You find outliers and apply a pricing model that finds the best gaps. The information is incredibly valuable. Take it from someone who did this for a living at one point.