As far as prizes go, maybe the GMs can randomly drop items or RE when they're killed by a snowball. One note though, snowballs work with ice skills (like multi ice or shark missile) so preventing spells/skills on the map during the event would be best.
A lot of games do this: allow players to wear santa costumes. Since the santa costume is GM-exclusive and would probably cause mass confusion and scamming if given to players, maybe the GMs can give out the santa hat only as a temporary Christmas item. That or give out the old green RC-elf costumes.





