The Difference: Sweeps, Lottos & Contests
A sweepstakes is defined as ‘a promotional drawing in which prizes are given away at no charge to the participants’. This is a game of luck, since winners will be selected at random. The prizes from a sweepstakes can range from small items like t-shirts to big things like houses, cars, and cash prizes. Sweepstakes sometimes offer additional entries for performing various activities like referring friends, sharing the sweepstakes on social media, and more.
A contest is defined as ‘an event in which people try to win by doing something better than others’. Winners will be chosen or judged based on their submission or performance. This is a game of skill, since winners will be selected based on merit. Contests can range from the tastiest recipe, to fastest time finishing a task, to most beautiful photograph. Some contests are judged by specific people or are open to public voting.
A lottery is defined as ‘a means of raising money by selling numbered tickets and giving prizes to the holders of numbers drawn at random’. Examples of a lottery include a fundraiser raffle or the Powerball and Mega Millions lottery. In this scenario the winner is chosen at random, but you have to pay to play. This is essentially a game of luck that has an entry fee. Lotteries are heavily regulated by the government and have lots of rules that must be complied with in order to be considered legitimate.
Taxes on Winnings
If you live in the United States it is important to know that if you win sweepstakes prizes, you need to declare them on your taxes. The IRS will expect you to declare your sweepstakes taxes on your 1040 form, even non-monetary sweepstakes prizes should be declared on...
The Largest US Sweepstakes Ever Won
The largest sweepstakes ever won in the United States was the Publishers Clearing House sweepstakes, which awarded a $365 million prize in 2019. The prize was awarded as an annuity, which paid out $5,478,006.11 per year for 30 years. The winner was a man named Dave...
The History of Sweepstakes
Sweepstakes and contests have been around for a very long time. The term “sweepstakes” dates all the way back to the 15th century! The term was created in reference to a common game where everyone placed in a “stake” and the winner thus “swept,” aka won, the stakes....