The difference between lotteries and sweepstakes: what you need to know

In the world of promotional games of chance, lotteries and sweepstakes are two common terms. Although both offer prizes based on a random drawing of participant numbers, there are significant differences between the two.

What is a lottery?

A lottery is a game of chance where participants buy a ticket and then wait for a random drawing. Winners are selected based on chance. Lotteries require a license and are strictly regulated by the Gambling Authority. Read more about what kind of license you need for your lottery here.

What is a sweepstakes?

On the other hand, a sweepstakes is more of a promotional strategy. Participation is free. Participants can win prizes by performing specific actions, such as filling out a survey, entering a unique code, or purchasing a product. They provide their name, email address, and any other required information. Participants in a sweepstakes do not pay with money (as in a lottery) but with personal data or attention to a brand. Sweepstakes usually do not require a license, but organizers must still comply with certain rules and regulations. Here too, the winner should be randomly selected. Unfortunately, this is not always the case in practice.Through Lotify, you can conduct a certified drawing where every participant has a fair chance.Difference in

Purpose

An important distinction is the purpose of the two types of games of chance. Lotteries are designed to raise funds for a charitable cause, while sweepstakes are often aimed at increasing brand awareness and consumer engagement with a brand. Here lies a big difference: while the financial proceeds of a lottery always go towards a socially relevant cause, the "proceeds" of a sweepstakes are commercial, namely connecting an audience to your brand.

Legislation

Another crucial difference is the involvement of the Gambling Authority. Lotteries fall under their strict supervision, while sweepstakes currently have less regulation unless they exceed certain criteria. Learn more about this in the blog: Setting up a reliable sweepstakes? Read these 8 tips. As a consumer, it’s important to know whether the organizer of the lottery or sweepstakes meets all legal requirements. As an organizer, it’s crucial to set up the lottery or sweepstakes in compliance with laws and regulations. Read more about Organize Consciously and see how Lotify ensures your lottery and sweepstakes are 100% compliant.

In short, while both lotteries and sweepstakes offer chances to win prizes, they differ significantly in their structure, regulation, and objectives. It is essential to be well-informed before starting to organize either.