Sweepstakes vs. Contest vs. Lottery: How US Law Tells Them Apart

A sweepstakes, a contest and a lottery can look alike. All three hand out prizes, and all three have winners and losers. US law separates them by three elements: a prize, chance and consideration, which usually means payment. A lottery has all three. Sweepstakes keep the prize and the chance but drop the payment. A skill contest keeps the prize and replaces chance with judging. This guide walks through each element, the federal statutes behind it and the gray areas. It reports what the sources say. It is not legal advice. Reviewed 11/14/2026.

Prize, chance and consideration

The US Postal Service puts the test in one sentence. Publication 52 has the definition. A lottery is "any scheme or promotion, regardless of state legality, where a prize is offered based on lot or chance and requires payment for participation." Note the phrase "regardless of state legality". For mail purposes, a promotion can be a lottery even where a state allows it.

The USPS Customer Support Ruling PS-307 adds the other half of the rule. Raffles that combine "prize," "chance" and "consideration" count as lotteries, and their tickets stay nonmailable. Then comes the key sentence. "When one or more of the three elements i.e., prize, chance, consideration, are eliminated from a raffle, the arrangement does not constitute a lottery for postal purposes."

Each element has a plain meaning. The prize is anything of value. The FTC order against Publishers Clearing House says it plainly. A sweepstakes is a promotion "in which anything of value is offered or awarded to entrants by chance or random selection." Chance means luck decides, not ability. Consideration is what you give to take part. PS-307 states it directly: "consideration" is eliminated "if persons may enter without payment of a fee."

State law adds its own layer on top of the federal test. This guide covers the federal rules and two state statutes, New York and Florida. It does not cover each state, so check your own state when a question turns on local law.

Why a lottery runs into federal criminal law

Two federal statutes do most of the work. 18 U.S.C. § 1301 covers bringing lottery tickets into the country or carrying them across state lines. It reaches any "lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance." The words "in whole or in part" matter. Chance does not have to be the only factor.

The penalty in § 1301 is stated plainly: violators "shall be fined under this title or imprisoned not more than two years, or both." 18 U.S.C. § 1302 applies the same idea to the mail. It covers whoever "knowingly deposits in the mail" letters, tickets or advertisements for such a scheme. Publication 52 confirms that lottery tickets and related items are nonmailable under 39 U.S.C. § 3001.

There are exceptions. 18 U.S.C. § 1307 says §§ 1301, 1302, 1303 and 1304 do not apply to advertisements and information about a lottery run by a state under state law. That exception has a condition. The material must appear in a publication from that state or another state with a lottery, or be broadcast by a station licensed there. A second exception covers schemes that are "authorized or not otherwise prohibited by the State in which it is conducted." It applies when a nonprofit or government body runs the scheme. It also applies when a scheme is "conducted as a promotional activity by a commercial organization and is clearly occasional and ancillary to the primary business of that organization."

Read that exception narrowly. It speaks about advertisements and information, and it depends on state law. The word "sweepstakes" does not appear in § 1307. This guide does not interpret the section further.

A sweepstakes is chance with no payment required

Federal postal law has its own definition. 39 U.S.C. § 3001(k) says "the term 'sweepstakes' means a game of chance for which no consideration is required to enter." The chance stays. The payment goes. That one change is why a sweepstakes is not a lottery under the three-element test.

The FTC says the same in consumer language: "Real sweepstakes are free and winning is by chance." Its 2023 alert on Publishers Clearing House adds: "It's illegal to ask you to pay or buy something to enter." The case ended with PCH agreeing "to pay $18.5 million to provide refunds, among other things."

Two state laws point the same way. New York General Business Law § 369-e covers promotions that hand out prizes "without any consideration therefor." Florida Statutes § 849.094 covers game promotions tied to the sale of consumer products or services, "in which the elements of chance and prize are present." The Florida law makes it unlawful for an operator "To require an entry fee, payment, or proof of purchase as a condition of entering a game promotion."

Chance can take more than one form. A classic sweepstakes draws winners at random after the entry deadline. An instant win game decides at the moment you play. The Cupcake Vineyards rules, for example, set "thirty-five thousand and six-hundred and fifty (35,650) random, computer-generated winning times." Our guide to instant win games explains how that works.

Skill contests swap chance for judges

A skill contest keeps the prize and removes chance. 39 U.S.C. § 3001(k) defines it as a contest in which "the outcome depends predominately on the skill of the contestant." The same definition adds a third point: "a purchase, payment, or donation is required or implied to be required to enter the contest." So the federal mail statute uses the term skill contest for contests that ask for a payment.

The FTC confirms that a skills contest "can ask you to pay to play." It also warns: "Skills contests can leave contestants with nothing to show for their money and effort." For mailed skill contests, § 3001(k) requires rules that state "the method used in judging." They must also state the cost of each round and "the maximum cost to enter all rounds or levels."

Real contest rules show what judging looks like. The Nationwide Tails and Touchdowns Contest scores four criteria at 25% each. They are creativity, relevance to theme, photo quality and emotional impact. GoDaddy's Ink Your Link Contest weights five criteria. The largest is "Strength and authenticity of the business story" at 30%. The smallest is distinctiveness and storytelling potential at 10%.

Judged contests often ask for more than your name. GoDaddy's rules say entering grants the sponsor "a nonexclusive, worldwide, perpetual, royalty-free right and license" to use the entry. Read that clause before you upload a photo or a story. Our guide to photo and video contests covers judging criteria and rights in detail.

No purchase necessary, and the reason for it

Remove the payment and you remove consideration. That is the whole reason for the line "no purchase necessary". If a free way to enter exists, the promotion keeps prize and chance but loses the third element. PS-307 shows the logic with raffles. A nonprofit may mail raffle tickets if "it is clear that a donation is not required."

For sweepstakes sent by mail, the statement is not optional. 39 U.S.C. § 3001(k) makes sweepstakes mailings nonmailable unless they disclose "that no purchase is necessary to enter such sweepstakes." They must also disclose "that a purchase will not improve an individual's chances of winning with such entry." The mailing, the rules and the entry form all have to carry both statements.

Sponsors who sell products, such as Coca-Cola, build in a free route. The Coca-Cola Football Ultimate Fan 2026 Promotion rules state: "Odds of winning a Game Prize are the same for Online Game Plays and AMOE Game Plays." Our guide to no purchase necessary and the free entry method shows how these free routes work in practice.

The differences side by side

• Lottery: prize, chance and payment. Federal law reaches tickets, mailings and advertisements under 18 U.S.C. §§ 1301 and 1302. State-run lotteries fall under the exceptions in § 1307.
• Sweepstakes: prize and chance, with no consideration required to enter, per 39 U.S.C. § 3001(k). Winners come from a random drawing.
• Instant win game: prize and chance, decided at the moment of play. The Coca-Cola and Cupcake Vineyards rules both state that no purchase is necessary.
• Skill contest: prize and skill. The outcome "depends predominately on the skill of the contestant." The definition in § 3001(k) covers contests that require or imply a fee. Judges score entries against published criteria.
• Raffle: a lottery when a donation is required. Not a lottery for postal purposes when the donation is clearly optional, per PS-307.

Gray areas where the labels blur

Bonus entries for buyers are the most common gray area. Some sweepstakes give extra entries for a purchase and also offer a free route. The PCH $5,000 Official Rules address this. All entries, "whether obtained through the Free Alternate Method of Entry (AMOE), watching advertisements, games, purchase, membership, or optional packages, are treated equally." Codes on packages work the same way. Our guide to product code promotions covers that case.

Mixed judging is another. The World's Unluckiest Traveler promotion from Travel Guard Group, Inc. uses both judges and votes. Judges "will select eight (8) Contest Finalists." Then the finalist with "the highest total number of Votes" during the voting period wins the grand prize. Neither luck nor the judges alone decide the result.

Some contests limit who can enter. GoDaddy's contest says "Entrants must be an active GoDaddy customer as of the time of entry." The rules call it a contest and score entries by criteria. Whether a limit like this counts as consideration is a legal question this guide does not answer.

The name on the page proves little. Nationwide calls its judged photo promotion a contest, and its rules also say "No purchase is necessary." The FTC order against PCH defines "Sweepstakes" to include "any contest, giveaway, drawing, or other enterprise or promotion" where prizes go out by chance. Look at how winners are picked, not at the label.

Three questions before you enter

First, ask how the winner is picked. A random drawing or random winning times mean a sweepstakes or instant win game. Judges and scoring criteria mean a contest. Both together mean a hybrid, and the official rules explain the order of steps.

Second, ask what you pay. For a sweepstakes, the answer should be nothing. The rules should name a free way to enter and say a purchase does not help you win. A sweepstakes that asks for money to enter breaks the rule the FTC states. A demand for money to collect a prize is a scam sign. Our guide to fake winner messages lists the warning signs.

Third, ask what you give up. A contest may ask for a license to your photo or story. A sweepstakes may ask for marketing consent. Both appear in the official rules, and our guide on how to read official rules shows where to find them. State laws differ, and this guide does not cover each state. For a question about your own case, ask a lawyer.