What Are Sweepstakes? Understanding Sweepstakes Definition

To businesses, a sweepstakes is an effective marketing opportunity. But for customers who participate in a sweepstakes contest, it’s an exciting opportunity to win impressive prizes. So what exactly are sweepstakes and how does it differ from conventional gambling and other chance-based contests? This article explains what sweepstakes are, how they work, and how to plan successful sweepstakes. 

• In a sweepstakes contest, the prize is awarded to a winner randomly selected by chance. 
• Sweepstakes are a common marketing tool used by companies, but they must follow specific legal regulations. 
• Companies can run a sweepstakes campaign to achieve a wide range of goals with measurable results. 

Sweepstakes Meaning

A sweepstake is a type of contest where the prize is awarded to a winner (or a small number of winners) selected randomly from a large pool of contestants. The defining characteristic of sweepstakes is that the prize is awarded purely based on chance rather than skill. 

What Are Sweepstakes?

The term sweepstake refers to any kind of contest where the participants who get to win a predetermined prize or prizes are selected at random. The implication of this is that prizes are won based on chance rather than the skills of the participants. 

Sweepstakes are a common marketing tool used by companies to create awareness about their brand, attract new customers, or reward their existing user base. For instance, a company may announce a luxurious vacation as the top prize to win as part of a promotional sweepstakes contest. 

To earn a chance to win, participants simply need to fill out an entry, engage with the company’s social media page, or make a random purchase. At the end of the promotional period, one winner is selected at random from the pool of participants. 

Sweepstakes are commonly confused with related terms like contests, raffle, or lotteries due to their similarities. For clarification, you can read our “sweepstakes vs contest” article to see how sweepstakes compare to contests. We also have an article about “sweepstakes vs raffle” which detailed a breakdown of how these two differ.

Types of Sweepstakes

Sweepstakes are unlike skills-based contests where winning a prize depends on the contestant’s abilities. At the same time, they are different from lotteries, gambling, and other luck-based games where participants need to spend money out of their pocket to enter the contest or to win. 

In fact, an important criterion in legitimate sweepstakes is the “no purchase necessary” clause. And even when a purchase is required to enter, the purchase does not increase the player’s chances of winning. 

A sweepstakes contest is quite flexible and can take different forms. Some of the common types of sweepstakes include: 

• SOI or Single Opt-In – A single opt-in sweepstakes has a simple workflow where the user fills in a single form with their personal information and contact details to enter the sweepstakes contest. It does not require any extra steps. 
• DOI or Double Opt-In: This takes the SOI a step further by making the users confirm their email or contact number. 
• Mobile Subscription: This type of sweepstake invites players to send a text message to a short code number in order to join the contest. 

These are just a few of the different types of sweepstakes contests that exist. To learn more about the exciting world of sweepstakes, you can read our detailed article on what are sweepstakes casinos. 

How Sweepstakes Work

A sweepstakes isn’t just organized for the sake of giving freebies away to people. It typically has a goal with measurable metrics. To ensure the success of your sweepstakes campaign, there are several tasks you’ll need to do in addition to building the sweepstakes itself. Here are some of the steps involved in planning and executing a sweepstakes:

• Establish the goal of the contest: You need to determine what the goal of your campaign will be and what you intend to achieve with it. This can be anything from increasing brand awareness to collecting feedback from customers. 
• Determine the sweepstakes prize: Once the goal of your sweepstakes campaign has been established, the next step is to choose a prize that’s worth this goal and attractive to your target audience. 
• Set the rules: This should cover everything from the timeline of the sweepstakes to eligibility criteria, privacy policy, and legal clauses. You also need to set the entry requirement which is what you need participants to provide to qualify for the prizes. 
• Design a UX: The UX (user experience) is what the participants will interact with when they participate in the sweepstakes. You must make this as seamless as possible for convenience. 
• Create the campaign: Based on the UX and entry requirements, create the sweepstakes campaign. You can run this on your own website, custom sweepstakes platform, or use a third-party tool. 
• Promote the Sweepstakes: Promote the sweepstakes via social media, email, partnerships with other brands, and any other suitable means. 
• Pick and announce winners: Once the indicated period for the sweepstake ends, the final step is to pick a winner or winners randomly from your list of entrants. You should announce the winners openly and also contact them to congratulate them.
• Wrap-up: Wrap the campaign up by following up on winners to claim their prize and measuring the success of your campaign. 

Sweepstakes Laws and Regulations

To run a sweepstakes campaign, there are several legal requirements that you should be aware of. The federal laws guiding sweepstakes promotions vary from one location to the other, so always check for what applies in your country or state. In the United States, the Federal Trade Commission, Federal Communications Commission, and the USPS are in charge of enforcing these laws.

One general rule is the no purchase necessary law, which stipulates that people don’t need to pay any entry fee or buy a ticket to participate in a sweepstakes campaign. However, even in cases where a purchase is required, the purchase does not increase a participant’s chances of winning. 

Another common rule is the alternate means of entry rule which requires companies organizing sweepstakes to provide multiple methods of entry. This will give participants an equal chance of entering the contest. In addition to online entries, companies may provide a postal service option or phone number to receive additional entries. 

There’s also the no-discrimination rule which stipulates that sweepstakes organizers must not discriminate against any participant or group of participants. This gives everyone a fair chance of winning as long as they’re eligible. Finally, different countries have laws regarding the disclosure of winners. In many jurisdictions, this must be made public and easily accessible. 

Adhering to these requirements, companies make their sweepstakes contests fair, transparent, and legitimate. Note that there are several sweepstakes scams that do not comply with these regulatory requirements. We have a detailed article about this topic and what players can do to avoid them.

Planning Successful Sweepstakes

One of the best things about running a successful sweepstakes campaign is analyzing all the data you have collected from the audience and measuring its impact. 

Generally, the most important yardstick for judging the success of your sweepstakes campaign is to measure it against the high-level goal you set at the beginning of the campaign. This is the most important factor for calculating the ROI of your campaign. After examining metrics directly related to this goal, you can look at additional data such as how much traffic you generated, social media engagement, feedback from customers, and so on. 

One of the ways to measure how well your campaign performed is to compare it to other sweepstakes campaigns. We have a detailed article about some of the most successful sweepstakes examples to help you evaluate the result of your campaign and marketing strategies.

Conclusion

There are various types of sweepstakes, each tailored to meet different business objectives, and selecting the right one is crucial for your campaign’s success. Whether you’re looking to run traditional sweepstakes or iGaming-specific ones, partnering with the right software development company is key. 

As an iGaming powerhouse with extensive experience delivering top-tier solutions for online casinos, sportsbooks, and lotteries, we have the expertise to design and develop iGaming-related sweepstake software. Contact us today to learn more about our services.