Giveaways & Contests

Sweepstakes vs contest vs lottery

The legal distinction that separates a fun promotion from an illegal one.

7 min read Updated April 29, 2026

"Giveaway" is a marketing word, not a legal one. Under US law, what you're actually running is a sweepstakes, a contest, or — accidentally — a lottery. The difference is the difference between a fun campaign and one that exposes you to state attorneys general. Three elements decide which one you have.

The three elements: prize, chance, consideration

Every promotion in the US gets classified by which of these three elements it contains: a prize (something of value), chance (the winner is selected randomly), and consideration (the entrant gives up something of value to enter — money, significant effort, or, in some states, even meaningful personal information).

Prize + chance + consideration = lottery. Illegal for private companies in most states. Only government-run lotteries can include all three.
Prize + chance, no consideration = sweepstakes. Legal. The winner is random, and entry is free.
Prize + skill (judged), with or without consideration = contest. Legal in most states, with caveats. The winner is selected on merit, not chance.

The trap is consideration. Many marketers think "consideration" only means money. It doesn't. Requiring a purchase, requiring entrants to drive somewhere, requiring extensive content creation, or requiring the surrender of detailed personal data can all push your "sweepstakes" across the line into lottery territory in some states. The safe pattern is to remove all three forms of consideration or to provide a clear, equivalent free alternative method of entry (AMOE).

Sweepstakes: the random-draw default

A sweepstakes is the most common promotion shape in marketing. Prize and chance, no consideration. Entry is free, the winner is selected at random, and the odds depend on the number of eligible entries. Examples: "submit your email for a chance to win a year of our service," "follow us on Instagram for a chance to win a gift bundle," "enter your name on our giveaway landing page."

The official rules for a sweepstakes specify the sponsor, eligibility, promotion period, prize description, odds-of-winning statement, winner selection method, and required state disclosures. Most consumer giveaways are sweepstakes. For end-to-end execution, see how to run an online giveaway.

Two state-level requirements add real overhead. New York and Florida require sweepstakes registration and bonding above certain prize-value thresholds; Rhode Island has separate retail-tied requirements. Sweepstakes legal requirements by state covers the current numbers.

Contests: judged on skill

A contest is judged on merit, not chance. Photo contests, video contests, essay contests, and recipe contests are all contests when winners are selected by judges based on stated criteria. Because skill (not chance) determines the winner, most states allow you to require some form of consideration — though several states still treat purchase requirements skeptically.

Contest rules include everything a sweepstakes does, plus:

The judging criteria, weighted if applicable
The judges' qualifications
Tie-breaking procedures
Rights granted to the sponsor in submitted material (license, ownership, attribution)
Submission requirements (format, length, originality, third-party rights)

The most common contest mistake is calling something a contest but actually selecting the winner randomly, or vice versa. The rules and the actual selection method must match. If you're running a photo or video contest, see how to pick a giveaway winner for the parts that overlap with random draws.

Lotteries: don't run one accidentally

A lottery is prize plus chance plus consideration. Private lotteries are illegal in nearly every US state — the government reserves them. The accidental-lottery patterns most marketers fall into:

Requiring a purchase to enter, with no AMOE
Requiring an entry fee, even a small one, with no AMOE
Requiring entrants to download a paid app, attend a paid event, or otherwise spend money
Requiring extensive personal information that some states (notably California) treat as consideration
Requiring effort that exceeds the de minimis threshold (long surveys, complex multi-step actions) without a free alternative

The fix in every case is the same: provide a clear, equally-weighted free alternative method of entry. The AMOE must give the same odds of winning as any paid path, must be plainly disclosed in the official rules, and must be operationally real (a working mail-in address, a free web entry path, or both).

How to pick the right shape for your campaign

Most marketing campaigns work best as sweepstakes. They're the easiest to administer, the easiest to comply with, and the easiest to communicate. Consider a contest only when judging produces something you actually want — UGC for your product page, customer stories for your launch, recipes for your cookbook. Skill-based selection is overhead; only run a contest when the judging output has independent value.

Never run anything that resembles a lottery. The legal exposure is asymmetric — the upside is small, the downside is a state attorney general's office. For platform-specific compliance overlays, see Instagram giveaway rules and compliance.

Quick test: Is the winner picked at random? Sweepstakes. Is the winner picked by judges on stated criteria? Contest. Does entry require money, effort beyond de minimis, or significant data, with no free alternative? Stop — that's a lottery. Add an AMOE or remove the consideration.

Frequently asked

Can I require an email address to enter? Is that consideration?

Standard contact information (name, email, basic demographics) is generally not treated as consideration. Extensive personal data — financial information, detailed health data, lengthy surveys — has been treated as consideration in some state interpretations. Keep entry data minimal.

Is "follow our account to enter" considered consideration?

Following an account, liking a post, and commenting are widely treated as de minimis effort, not consideration. Requiring entrants to create substantial original content, drive to a location, or spend money pushes toward consideration territory.

What's an AMOE and when do I need one?

An alternative method of entry (AMOE) is a free path into the promotion that does not require a purchase or significant action. You need one any time your primary entry path could be argued as consideration. The AMOE must give the same odds as the paid path and be plainly disclosed in the rules.

Can a contest require a purchase to enter?

Several states allow it because skill (not chance) selects the winner, but several treat it skeptically. The cleanest pattern is to offer an AMOE for contests too — it removes the legal ambiguity and costs you very little operationally.

If I run a "random drawing" but call it a contest, am I covered?

No. The actual selection method controls the legal classification, not the marketing label. A random drawing is a sweepstakes regardless of what you call it, and the rules and AMOE requirements that apply to sweepstakes apply to it.