I have played MANY battle of the band nights, most are giant frauds and a waste of time, but if you're a new band it is a great way to meet other bands to gig with.
They are not all rigged. We won one a few years ago, we were a stoner rock band who were new so we had no fans, and we were all anti-social so we only had maybe 10 friends there between the 4 of us for the finals. We were the obvious fan favourites since day 1 though, most people suck at putting on a show, that is where you embarrass them. We ended up winning $1500 in recording time at the biggest studio for 500 miles. The next years winners were also promised $1500 cash.... they never saw a cent of that.
If you want some good advice, use your 20 min set or whatever to your advantage, get up there rock hard, do not dilly-dawdle between songs, in fact bleed throughs and carry overs are your best weapon. The singer can say get the ef up or whatever between the note drone then kick into another song without stopping the last one. Audiences eat that spit up, for some reason people are always the most floored by melodies, it is also a good secret to success in cover bands.
EDIT: Well I left that window open WAY too long.... your already out, you made some friends. You win, be sure to talk to the bar management and try to get on opening for somebody at least.