Giving away free coins would be fine if it were coming from the company or person. But it isn't.
It is voters deciding that coins from the reward fund should be given away (as part of a sports-themed concept that includes blogging, an element of gameplay, and wider distribution of rewards with a low barrier to participation).
It is no different than voters deciding that coins should be spent on a billboard, or a photoshoot, or developing a mobile app, helping to fund Steemfest, or paying a writer/blogger, or anything else.
That's the nature of this system. Voters decide to allocate rewards where they think it provides the most value. I and a good number of other voters think Steemsports giving away coins to players is a good use of reward funds. I don't even participate in the games most of the time.