Guide to Contests, Sweepstakes, and Lotteries

The U.S. has strict laws barring private lotteries. A lottery is a promotion that has three elements:

  1. Prizes
  2. Winners Chosen by Chance
  3. Consideration

To avoid being classified as an illegal lottery, sweepstakes must ensure that at least one of these elements is missing. Because prizes and luck are central to sweepstakes where the winners are drawn at random, legitimate promotions can never have consideration.

That means you will never have to pay to enter legitimate sweepstakes and purchasing a product will not improve your odds.

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 in the giveaway.

Some states have their own sweepstakes rules; for example, sponsors in New York must bond prizes valued above $5,000. For more information, see my articles about sweepstakes laws and regulations.