There are differences between sweepstakes, lotteries, and contests. Find out what, as well as information about Canadian sweepstakes and premium offers.
What is a Sweepstakes?
By definition, sweepstakes in the United States are advertisements or promotional devices by which items of value (prizes) are awarded to participating consumers by chance, with no purchase, consideration or entry fee required to enter or win.
What is a Lottery?
Unlike a sweepstakes, a lottery is a promotional device that contains all three elements – prize, chance and consideration (a purchase or fee). Items of value (prizes) are awarded to members of the public by drawings (chance), but requires some form of payment or purchase (consideration) to participate. The most common examples, of course, are the local state lotteries in which consumers must purchase an entry ticket for a chance to win. Lotteries are illegal except when conducted by states and certain exempt charitable organizations. If you believe you have received a solicitation in the guise of a sweepstakes which is an illegal lottery (requiring you to pay to enter), you should contact your local Post Office or consumer protection office.
What is a Skill Contest?
Skill contests are different from sweepstakes offers. In a skill contest, the winner is determined by skill — not chance — and an entry fee or purchase may be required. There are many legitimate skill contests. For example, in a skill contest you may write a winning jingle, solve a puzzle, or answer a question correctly. Your skill or knowledge is what wins the contest, not chance. Know how the contest works, what the prizes are, and what the fees are before paying anything to the company sponsoring the Skill Contest.
Canadian sweepstakes law, unlike American law, requires that the third component of chance be removed. Sponsors cannot use pure luck to determine who wins a sweepstake. There must be at least some element of skill involved. In order remove the element of pure chance, sponsors in Canada may narrow the field of potential winners by requiring a skill testing question to enter their contests. Only those who at least pass the skill testing question are eligible to win prizes.
What is a Premium Offer?
Premiums are gifts that companies make available to all recipients who respond according to the company’s instructions — for example, a travel bag received with a new magazine subscription. When everyone who responds to the offer receives the same gift item, without any element of chance, the offer is not a sweepstakes as there is no chance.