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What’s the LEGAL Difference Between Contests, Sweepstakes, And Giveaways?

contests, sweepstakes, and giveaways

If you’re like us, you’ve probably entered a giveaway or two on social media. Free spa gift card? Heck yes. A brand new DSLR camera bundle? Sign us up. All I have to do to win sweet prizes is follow this Instagram or post a Facebook comment? Awesome!

Contests, sweepstakes, and giveaways are all fun and games — literally — but if you’ve never  hosted  one yourself for your business, you should probably know the differences between the three. And the legal ramifications and requirements of each. Just sayin’.

What is a contest?

A  contest  is,  according to giveaway platform Rafflecopter,  an event in which people try to win a prize based on the quality or performance of their submission. One winner or several winners are chosen after their entries are judged against others.  

Think of it this way. Winning involves an element of skill. Instagram contests, for example, might ask participants to post specific photos, create a caption for a photo, answer a trivia question, or complete some sort of action that can be judged in order to win.

That’s also why social media contests are such popular and effective marketing tools for brands. You can ask participants to get creative and share photos of your products or reviews of your services. 

What are sweepstakes?

Sweepstakes,  on the other hand, are promotional drawings in which prizes are given away at random, and at no charge. There’s no element of skill or action required by participants, except to enter the sweepstakes.

Sweepstakes are kinda like raffles or lotteries, except raffles and lotteries require you to pay to enter the drawing. Sweepstakes are free to enter.

Going back to Instagram, an example of sweepstakes rules include asking participants to follow your account or like your post to win. These actions don’t involve skill, creativity, or quality, and winners are chosen at random rather than judged. Sweepstakes can help brands and influencers drive up their engagement and boost their brand reach.

What is a giveaway?

Now that you know what the differences are between contests and sweepstakes, we’ll throw a wrench into the mix. Or make it easier to understand, hopefully. 

A “giveaway” is an umbrella term for contests and sweepstakes, as well as lotteries, in case you were interested. Giveaways describe all of these because they all share a common outcome: a winner receives some sort of prize as the outcome. 

Why you should understand giveaway, contest and sweepstakes laws

Why does this all matter to you? If you’re a brand or social media influencer thinking of hosting some sort of giveaway, it’s  super  important that you’re following the rules on the platform that you use. For example, Instagram  has specific rules around hosting giveaways  that you should know.

You also want to host a successful giveaway! If your giveaway rules are unclear, too difficult, or don’t make sense, you may not get the number of participants you’re hoping for. And if you’re hosting this contest, sweepstakes, or giveaway to promote your brand, the results may be less than stellar.

Oh, and you also wanna avoid accidentally (or purposefully) hosting a private lottery. The United States has strict laws against doing this, and they’re illegal. 

Brush up on the rules before you host one

Did we scare ya with that last part about illegal private lotteries? We didn’t mean to! It’s pretty unlikely that you’ll accidentally host one. And if you understand the key differences between contests, sweepstakes, and giveaways, you’ll do just fine.

Along with this blog post, we highly recommend checking out Instagram’s rules for running giveaways. Actually, understanding the social media platform’s rules for lots of things, like sharing sponsored posts or disclosing paid content, is pretty important for brands or influencers to know.

Grab out  Instagrammer’s Guide to Legal-ish,  which covers all of the important info we just mentioned and more!

Protect yourself, your biz, and your social media content with our  Instagrammer’s Guide to Legal-ish.  Then when you’re ready, go forth and host an awesome giveaway.

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