Yes, I recall this the same way as you. I believe it was Dave Lanning's idea for the club to place a bet on themselves as a publicity stunt, with the money shared out if they won. The bet came in and the Promotion and the riders got paid a share, but Dave Lanning didn't, and he had to later sue the club (or at least threaten to sue) for his share.
Even back in those more prosperous times, there was no prize money for winning the league.