I've never been involved in it personally, but a guitarist I used to hang with said that when he was starting out back in the 80's there were several venues in our area (Central CT) that did this.
From what he told me, the most common tactic was that a club owner would say, "we'll let you play (for an hour, half-hour, whatever) BUT you have to sell X number of tickets for that night's show" and hand them a stack. The more stage time you wanted, the bigger the stack of tickets was.
So those cases, the band members would pay for the tickets themselves so they were guaranteed the spot and then try to re-sell the tickets they had already paid for.
Feel free to take this with a grain of salt though. I'm just repeating what I was told by somebody else.
That is usually the way it works, and it's been going on for years. It seems to be most common with Metal bands (at least around here), though I'm not sure why that is.