Sweepstakes frequently have eligibility limited by international, national, state, local, or other geographical factors.
Sweepstakes are often referred by marketing promoters as second-chance sweepstakes when utilized in conjunction with the awarding of unclaimed prizes during instant-win promotions.
A person who enjoys entering sweepstakes as a hobby is often referred to as a "sweeper". While the majority of sweepstakes promotions are open to sweepers who are eighteen years of age or older, there are many sweepstakes open to entry by children of younger ages.
Sweepstakes are generally easier and quicker to enter than contests, and sweepstakes are also legally different from contests in the United States as sweepstakes promotions are prohibited from requiring a purchase to enter. Consumer promotions advertised as contests, however, can require an entry fee or proof of purchase (usually in the form of submitting an original proof-of-purchase label or UPC code found on the sponsor's product packaging along with a mail entry). The reason why contests are treated differently is that the winners are not chosen by chance but by an element of skill. Although some sweepstakes ask for a proof of purchase or UPC code, the sponsors must provide an alternate method of entry if they do so. Sweepstakes official rules can specify daily, weekly, monthly, one-time, or unlimited entry by participants.
In the U.S., sweepstakes sponsors are very careful to disassociate themselves from any suggestion that players must pay to enter, as this would bring them into conflict with federal lottery laws. Sweepstakes typically involve enticements to enter a consumer promotion for prizes that range from fantastic wins such as cars or large sums of money to smaller prizes that are "hot" (i.e. currently popular with consumers in the United States) such Apple iPods. There should be no monetary cost to the entrant to participate for the sweepstakes prize drawing (although some online sweepstakes require entrants to subscribe or promotional mailing list) and sweepstakes winners should also not be required to pay a fee of any type to receive their prizes.
Because of their potential for abuse, sweepstakes are heavily regulated in many countries. The U.S., Canada, and individual U.S. states all have laws covering sweepstakes, resulting in special rules depending on where the entrant lives. The U.S. Federal Trade Commission exercises some authority over sweepstakes promotion and sweepstakes scams in the United States. Notably, sweepstakes in Canada and several European countries require entrants to solve a mathematical puzzle, making it a contest of skill, in order to overcome requirements that would classify sweepstakes as a form of gambling.
As an example relating to state laws pertaining to sweepstakes promotions within the United States, Tennessee residents are prohibited by a policy of the Tennessee Alcoholic Beverage Commission (and not a state law) from entering sweepstakes online sponsored by manufacturers of wines and liquors; however, Tennessee residents may enter many of these same sweepstakes promotions by entries delivered by the U.S. Postal Service. Another example is wherein Tennessee state law prohibits sweepstakes agencies and sponsors from requiring sweepstakes prize winners to submit to "in perpetuity" publicity releases.
Most corporate-sponsored sweepstakes promoted in the United States limit entry to U.S. citizens, although some allow entry by legal residents of both the United States and Canada.
Among the most popularly known sweepstakes in the United States are the American Family Publishers Sweepstakes (now defunct), Publishers Clearing House and Reader's Digest Sweepstakes, each of which strongly persuade entrants to purchase magazine subscriptions by placing stickers on contest entry cardstock while promising multi-million dollar (annuity) winners who will be "announced on TV." The American Family Publishers sweepstakes traditionally used paid advertisements during NBC's The Tonight Show to announce its grand prize winners (for many years, its celebrity spokesman was Ed McMahon).
The HGTV "Dream Home Giveway" is the American cable network Home & Garden Television annual project house and sweepstakes, held since 1997. The sweepstakes promotion commences with a January 1 television special showcasing the fully furnished, custom-built home valued in excess of one million dollars; viewers are invited to enter online or by sending in a postcard. The 2007 HGTV sweepstakes drew 41 million entries.
Sweepstakes are frequently used by fast-food restaurants to boost business. One of the most popular has been the McDonald's Monopoly "instant-win " game-piece promotion (free game pieces are made available by requests through the U.S. mail) although the odds of winning the McDonald's Monopoly jackpot prize are usually much greater than the odds of winning many U.S. state lotteries). Soft drink companies also sponsor many sweepstakes, such as the Pepsi Billion Dollar Sweepstakes game and the Pepsi Stuff loyalty rewards program that allowed Pepsi drinkers to accumulate points from packages and cups and redeem them for high-quality, free merchandise. Pepsi Stuff was Pepsi's largest and most successful long-term promotion ever and it ran for many years in the US and in many countries around the world. Other sponsors may require the submission of a UPC of a company product (with provision for receiving a "free" UPC code) for entry into the sweepstakes drawing.
Sweepstakes must be carefully planned to not only comply with local laws but curtail forms of entrant fraud and abuse. Before home computers were popular, a common method of entry was a mailed, plain 3" x 5" index card with the entrant's name and address. Massive computer-printed entries made a new requirement that entries must be "hand-printed". Laser printers able to mimic ink pen writing are also a problem for sponsors. In most sweepstakes, entrants and their relatives must not be related to the sponsor or promoter.
Many state lotteries also run a second chance sweepstakes in conjunction with the retail sale of state lottery scratch cards in an effort to increase consumer demand for scratch cards and to help control the litter problems associated with the improper disposal of non-winning lottery tickets. As a lottery tickets are considered to be bearer instrument under the Uniform Commercial Code, these lottery scratch card promotions can be entered with non-winning tickets that are picked up as litter.
Many sweepstakers meet locally in "clubs" and nationally at a yearly convention, which 800 people attended in 2006. The 18th National Sweepstakes Convention was held in June, 2007 at Dearborn, Michigan. Sweepstakes conventions are hosted by a local club in a different state each year.
There is also a tradition of office sweepstakes (or office pool in the U.S.), which usually take place over large sporting events (Melbourne Cup, Grand National, World Cup etc), where you put in a stake into the pot, and get a horse/team drawn out of the hat. The winner then takes the pot.
It should be noted here that the sponsors of legitimate sweepstakes by law do not require the prize winners to pay any shipping or handing charges in order to win or receive their prizes.
Sweepers frequently send out SASE (self addressed, stamped envelopes) to receive free game pieces, official entry forms, and copies of the official rules that are unique and pertaining to individual sweepstakes promotions.
Entering sweepstakes by mail is declining in popularity, and many more sweepers are choosing to enter online sweepstakes. Online sweepstakes are most often quick and easy to enter, provide confirmation when an entry is received from the sweeper, and require no investment in postage, card stock, and envelopes. It is much more convenient, more efficient, and less expensive to enter sweepstakes over the Internet as opposed to preparing and mailing sweepstakes entries by postal mail.
Most U.S. sweepstakes promotion agencies require that most postal mail entries have three components:
Many other U.S. sweepstakes rules permit postal mail entry on the less expensive 4" x 6" U.S. postal cards.
It is reasonable to conclude that a traditional, first class mail entry costs the typical U.S. sweeper 50 cents (excluding time or travel) to submit each sweepstakes entry via the U.S. mail. Internet sweepstaking permits one to potentially enter hundreds of sweepstakes each day without the stationery and postage expense.
There are many online sweepstakes directories, some offering advanced features such as tracking which sweepstakes have been entered and possibly providing many different categorizations for the competitions listed.
Online sweepstaking web sites offer additional organizational methods for keeping track of your entries, and finding sweepstakes with the best odds for you to win. Some include local/restricted promotions, which limit the amount of registrations into a particular sweepstakes.
There are also other online services, which automatically enter members into sweepstakes. Members sign up once and are entered to various sweepstakes each month. This saves entrants time and effort; however, some sponsors of sweepstakes prohibit entries those kinds of automated sweepstakes entries since they want entrants to interact with the online presentation at the prize sponsors' websites; these sweepstakes promotions often employ CAPTCHA (an acronym meaning Completely Automated Public Turing test to tell Computers and Humans Apart) and reCAPTCHA screening technologies to prohibit automated entry.