Oh, that's always so frustrating. It may simply be to restrict the number of subs to something manageable, I suppose. Either that, or because prizegiving ceremonies and publicity are a notoriously damp squib if the winners can't/won't turn up. But still jolly annoying.
As a Londoner, I'm routinely frustrated by prizes aimed at other regions. There aren't many aimed at us, and I remember more one where they said, exactly, "For writers from Wales, Scotland, Northern Ireland and the English Regions."
I felt like taking them to the European Court of Human Rights, for discrimination. The only people who couldn't enter were, basically, Londoners.