Pat posted this question on Taxes on Winnings: Why do Canadians have to answer a skill testing question? Does not make sense to me…
The explanation for this question is so detailed I have entire section dedicated to it in my upcoming book. I will give you a shortened version here.
The reason we must answer a skill testing question in order to win in Canada is; sweepstakes are illegal. Yes, I said illegal. Sweepstakes were made illegal to protect Canadians from scams.
Companies wanted to use giveaways in their promotions and advertising as they are a fantastic marketing tool, but couldn’t. Some brilliant lawyer found a loophole in the law.
Contests were not illegal so if the entrant exhibited a form of skill, the promotion would be legal. Therefore, we answer a skill testing question making the giveaway a contest, and not a sweepstakes.
It’s been more than 200 years since the original law was put into effect, so I don’t think it will be changing anytime soon. Keep your calculator handy!
If you have a sweepstakes, contest or giveaway question, please email me.
Carolyn Wilman (aka @ContestQueen) is a Digital Marketing Strategist and Sweepstakes Specialist. Carolyn teaches others how to Find, Organize, Enter and Win giveaways along with working with companies to create, and viral market, winning promotions maximizing ROI and loyal customers.