Lotteries, Sweepstakes & Contests - What's The Difference?

A lottery is a promotion that has three elements:

• Prizes
• Winners Chosen by Chance
• Consideration

In order for a sweepstakes to be legal it must ensure that at least one of these elements is missing. With a sweepstakes you have only two elements: prizes and luck, where winners are drawn at random. Legitimate sweepstakes can never have a consideration.

Many people use the terms "contests" and "sweepstakes" interchangeably. However, contests are giveaways that have some element of skill to them. The person with the funniest joke, most moving essay, most beautiful photo, tastiest cake recipe, etc. will be chosen as the winner. This rules out the second element of a lottery: winners chosen by chance. A contest will have prizes awarded based on consideration or skill.

Note that contests, where the winners are chosen based on skill, can legally charge a fee to enter, because the element of chance is not present.

What does "consideration" mean? In sweepstakes terms, consideration is simply payment for a prize. Payment does not have to be monetary, it can be the recipe you enter, the essay you write, or the photo you submit. These items generally become the property of the sponsor. Be sure to read the rules to verify entry ownership.