Guide · 3 min read

Sweepstakes, contests and lotteries: what is the difference?

Why a real sweepstakes never asks you to pay, how contests differ, and the quick test to tell a legal giveaway from a scam.

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People use these words as if they mean the same thing. They don't, and knowing the difference is the easiest way to spot a giveaway that isn't playing fair.

The three ingredients

A prize promotion can include three things: a prize, an element of chance, and a payment to take part (lawyers call this "consideration"). In the US, private companies generally can't run promotions that combine all three, because that is a lottery, and lotteries are usually run only by states.

Sweepstakes: prize and chance, but free

Winners are picked at random, so to stay legal a sweepstakes removes the payment. That is why you see "No purchase necessary" in every genuine sweepstakes, along with official rules and usually a free way to enter.

Contests: prize and skill

A contest picks winners by judging something, like a photo, an essay or a recipe, against published criteria. Because skill decides the winner, some contests can charge an entry fee, depending on state law.

Lotteries: prize, chance and payment

You pay for a ticket and winners are drawn at random. Official state lotteries are legal. A private "lottery" that asks you to pay, especially by gift card or wire transfer, is almost always a scam.

The quick test

  • Picked at random and asks you to pay to enter or claim? Walk away.
  • Says "No purchase necessary" and has official rules? Likely a real sweepstakes.

More warning signs: How to spot a fake sweepstakes. This guide is general information, not legal advice.