Types of Gambling: Sweepstakes, Contests, and Lotteries

Every person in the United States has seen, participated in, or may recognize that some type of gambling or betting is in play when a sweepstakes, contest, or lottery occurs. These three games are the most common types of gambling. All three are of course related, however they are also different. For instance, sweepstakes are related to some type of prize give away where participants are placed into some type of system and the winner is selected at random. Sweepstakes can award any prize imaginable from houses and vacations to cars and backstage tickets. On the other hand, contest winners are selected based on some type of, you guessed it contest. For example, the entry with the best handwriting, most influential essay, longest home run etc. Lotteries meanwhile require a participant to pay some type of financial fee in order to be crowned a winner. Lotteries must abide by strict regulations by the state and/or the federal government. Thus, lotteries tend to only be legal if run by some state entity (such as Mega Millions and Powerball run by the state).

Lets try to decipher the three common types of gambling a bit more:

Types of Gambling: Sweepstakes:

  • A promotional drawing in which prizes are given at no charge to any participant. The winners of the are selected through a randomized method. (AKA = luck)
  • For a sweepstake to abide by the law it has to have one of the following elements missing. If it has all three elements it is not legal.  Most remove consideration aspect. Consideration is akin to monetary value that is paid or offered to the company or individual putting on the promotion. Therefore, meaning that a person does not have to pay to enter a sweepstakes. If an event says it is a sweepstakes and it requires you to pay than it is a scam and illegal.
  • Promotion = putting up prizes that have value
  • The winners of the promotion are chosen by random
  • There is an element of consideration (bargain for exchange)

Types of Gambling Contest:

  • An event where individuals try to win the prize by doing something better than others. (A test of skill)

Types of Gambling Lottery:

  • Using money raised through the selling of a number of tickets as the prize. The selected champ of the prize is randomly selected. A lottery can include such things as a raffle and fundraisers. (Pay to play and win)

Additional Information 

  • If you want further information on gambling in general check out our prior article on the subject here.
  • The New Yorker had an interesting take on gambling if you wanted to check that out.
  • And of course if you need assistance getting over gambling addiction there are some articles available here.
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