I came across this Last Week Tonight with John Oliver video this week and thought it was interesting conversation on what is legal and illegal when it comes to sweepstakes, contests and lotteries.
If you watched the video, for now paid fantasy sports sites are legal, but read below to find out why.
Excerpt from How To Win Cash, Cars, Trips & More!:
There is a difference between a lottery, a contest and a sweepstakes. It is important to understand the differences because it could determine what types of promotions you prefer to enter.
Lotteries and Sweepstakes Versus Contests
You’re probably aware of the words “lotteries,” “sweepstakes,” and “contests,” but you may not really understand how they differ from one another. This section will discuss their differences, as well and their relative advantages and disadvantages.
It’s easier to define sweepstakes and contests by starting with their more familiar grandfather: the lottery. A lottery is any game that consists of three elements. These three elements are chance (luck), the entry fee (sometimes referred to as the “consideration”), and the prize. The first element—luck—is introduced by the very fact that you’re competing against thousands of other people by predicting several numbers that will be chosen at random. The entry fee is generally the price of the ticket itself. Most lottery tickets cost one dollar. And the prizes are usually money.
What differentiates a sweepstakes or contest from a lottery is that one of these three elements has been removed. In a sweepstakes, that element is the entry fee. In other words, the game is still a game of chance, and there are still prizes to be won (although not necessarily cash prizes), but you don’t have to pay to enter.
Contests retain the entry fee but remove the luck as a determining factor. The entry fee is usually in the form of purchasing one or more of the company’s products. For example, a contest often requires you to send in a proof of purchase or label. Obviously, you cannot obtain these items without buying the product. It doesn’t matter whether you personally bought it or one of your friends purchased it. The luck is removed by adding an element of skill. Whereas sweepstakes are determined through random drawings, contests require the participants to perform in some way. A contest may ask you to write a song or create a rhythm, or explain why you use a product. A panel of judges determines which contestant has demonstrated the most skill.
People tend to believe contests are more legitimate because they’re sometimes required to pay an entry fee. One reason companies like contests so much is that they are another way of generating affordable advertising. Not only does the contest itself increase consumer interest, but the company might end up with a catchy slogan or jingle for its product when the contest is over. This slogan might just be as good as one created by a professional marketing firm, and the prize given to the winner is likely to be less expensive than hiring such a firm.
How to Win Lotteries, Sweepstakes and Contests in the 21st Century by Steve Ledoux. Copyright ©2004 Santa Monica Press LLC. Used by permission of Santa Monica Press LLC, 800-784-9553, www.santamonicapress.com.
As I learned from Caroline Myss, I have the Gambler archetype. (Full list here.) Thankfully, I am also incredibly cheap. I cannot justify throwing away my money on gambling. That said, I occasionally buy lottery tickets when I feel lucky or the jackpot is huge, but it’s not a regular habit. The reason I love entering sweepstakes so much is:
- my odds are winning are far greater than gambling,
- and it’s free!
Now, in the video the CEOs of both Draft Kings and Fandeal both state their sites offer a ‘game of skill’, which would make them a contest, not gambling. Since you pay a fee for an opportunity to win money, by selecting players and teams, by the definition above, they are correct, these sites host contests, not lotteries (gambling).
As I am not a sports fan, therefore I don’t have the foggiest idea how to pick teams, players, etc. I leave it to those who are and have a greater chance of winning. That said, if you watch the video, your odds of winning are dismal. Unless it’s your full time job, it’s highly unlikely you will win. Save your money.
If you do want to play fantasy games, my advice is; play the free ones offered by the sports television stations. Not only do you have a change to win prizes, but your odds are far greater.
Do you play fantasy sporting games?