What is the ruling on watching a permissible game if the loser has to pay?

There is no religious impediment to watching permissible games, but it is not permissible to watch games that involve something prohibited, like gambling, if that entails encouraging its participants. What you mentioned, that the loser pays the winner, is prohibited gambling. Therefore, if watching this permissible game encourages these people or signifies approval of their actions, then it is not permissible.