I have played round with a method similiar to this before, in the end, the low divis were what killed it, had a great SR, but always seemed to be dealing with hot favs, so divis were low. The way I was doing it was the fav must be $3 clear of the second fav. However with yours, allowing the 2nd fav to be closer than that could be a benefit.

To check i'm on the right track, if the fav is paying $3, the second fav has to be $4.98 or greater, is that correct?

Cheers