Sweepstakes vs Raffles: What’s the Difference and Why It Matters
Winning grand prizes always triggers interest among the people, and this becomes a great opportunity for operators to make money and raise brand awareness. There are two types of promotional contests available here: sweepstakes and raffles.
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Though many of you may consider them the same from the perspective of giving away prizes to lucky winners, there are differences between raffle and sweepstakes. From charging a fee for the ticket in raffles to providing free entry to win grand prizes in sweepstakes, there are several details that operators must understand. Read ahead to learn about these contests and compare sweepstakes vs raffle.
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What is a Sweepstakes?
In the sweepstakes model of promotional games, winners are selected entirely by chance. The primary concept of sweepstakes is simple: people enter for free, and a winner is chosen at random from all eligible entries. While the entry to participate in the games is free, the players have to perform some simple tasks to obtain a chance to win, such as
- Signing up for a newsletter
- Sharing a post
- Following a social media account
- Buying a product
- Writing a review
Businesses tend to make the most of sweepstakes software by collecting thousands of entries from the players. This process helps them gain attention, grow audiences, and build brand loyalty. Businesses dealing with sweepstakes promotions must clearly state that there is “no purchase necessary” for sweepstakes, as it saves them from getting classified as an illegal lottery.
Sweepstakes can be various types based on the access medium, such as
| Type of Sweepstakes | Description |
| Online Sweepstakes | This model involves players entering the competition digitally. Depending on the choices by the sweepstakes software distributors, entry usually involves submitting a form, signing up for a newsletter, or following and engaging with a brand’s online content. |
| Social Media Sweepstakes | In this, businesses host giveaways directly on platforms like Instagram, Facebook, or Twitter. Entry actions might include liking a post, tagging friends, sharing content, or following a page. |
| Mail-In Sweepstakes | This is by far one of the oldest ways, where participants mail in their entry on a postcard or form. These sweepstakes are used by some brands to reach audiences who prefer offline promotions. |
| SMS Sweepstakes | This is one of the fastest and most efficient ways to participate in sweepstakes. Participants can enter by sending a text with a unique keyword to a designated number. |
| Multi-Level Sweepstakes | In this model, participants have to complete additional actions, like referring friends, sharing a post, or engaging with specific content to confirm their entry. |
What is a Raffle?
A raffle is a promotion where participants gain a chance to win prizes after buying tickets. All the participants pay a predetermined amount for each ticket, to gain entry into the draw. If the player buys more tickets, they can increase their chances of winning. This technique makes people spend more to boost their odds.
Ideally used for fundraising, schools, community groups, nonprofits, and charities often run raffles to raise money for a cause. These causes can be
- Funding a school trip
- Supporting a local family
- Paying for new community equipment.
The money collected from ticket sales goes toward this goal, while winners get prizes donated by local businesses or sponsors. Raffles are classified as gambling under federal laws. Even if the business is hosting raffles for a cause, they still have to take care of special permits, bonding, and tax filings, as ticket price is included in the whole picture.
| Types of Raffles | Description |
| 50/50 Raffle | In the 50/50 raffle, the prize is half of the total money collected from ticket sales. The other half goes to the organizing group or charity. |
| Reverse Raffles | Unlike the standard raffle, the winner in this type of raffle is the last ticket to be drawn after the others have been eliminated. |
| Standard Raffle | In the standard raffle, players purchase tickets, and a winner is chosen at random via a draw at the end of the raffle period. |
| Online Raffles | By leveraging the power of the internet, tickets in this raffle are sold through licensed online platforms. Winners are drawn digitally, and prizes are shipped directly. Online raffles help in reaching more people. |
| Instant-Win Raffles | This is an instant gratification system where participants find out if they’ve won a prize right after buying their ticket, instead of waiting days or weeks for the draw to end. |
Raffle vs Sweepstakes: Differences
There are multiple factors based on which you can compare raffle vs sweepstakes. Here are some of those key factors.
| Comparison Factor | Raffles | Sweepstakes |
| Entry Requirements | The biggest difference between raffle and sweepstakes is how people enter. Raffles require people to buy a ticket for a chance to win. This makes raffles a form of gambling in many places. | On the other hand, sweepstakes are usually free to enter, and in many countries, they must be free to stay legal. |
| Purpose | Raffles are primarily used for fundraisers. Schools, churches, clubs, and nonprofits organize raffles to collect money for a specific purpose, which is why the ticket has a price. | In contrast, sweepstakes gaming systems are used for marketing and promotions. Brands run sweepstakes to build email lists, boost website traffic, grow social media followers, and raise awareness about their products or services. |
| Legal Regulations | Raffles involve payment. Therefore, they are often regulated like lotteries. You need to acquire a license to run a raffle legally. Some regions limit raffles to charitable or nonprofit organizations only. | As compared to raffles, sweepstakes do not involve money. But they must comply with strict rules that forbid requiring payment for entry. Operators running sweepstakes must state a clear disclaimer of “no purchase necessary.” |
Conclusion
If you are an operator, be clear about your goals behind the promotions, whether they are raffles or sweepstakes. As there are regulation-related differences between raffle and sweepstakes, anything done unplanned can cost you fines and legal issues. But, you can let this hassle go off by hiring a professional.
TRUEiGTECH is an industry leader in enabling promoters to run their businesses, whether it is raffles or sweepstakes. We can build reliable raffle games and sweepstakes management software for you. Besides development, TRUEiGTECH can also assist you with obtaining valid licenses and ensuring legal compliance in your jurisdictions. If you are up for a similar business, contact us today.
Written by: Prish K
Prish K, Head of Marketing at TRUEiGTECH, holds an experience of more than 10 years in the iGaming domain. Starting from strategic planning and digital marketing to team leadership and cross-functional collaboration, he is a master of his domains. For more than a decade, he has shown a promising commitment to fostering result-driven and creative work outputs. Beyond guiding newcomers and established iGaming operators with the right software solutions for their business needs, Prish also wants to share his industry expertise and knowledge through insightful blogs and articles