One of the most notable ways that sweepstakes and raffles differ is the requirement that sweepstakes offer a free method of entry. This article will explain why organizations must provide a free method of entry when they run a sweepstakes, how many people use the free method of entry, how it works, and what effect it has on the campaign.
Why do I need to offer a method of free entry?
A sweepstakes must provide a free method of entry to avoid their classification as gambling. Most government agencies classify raffles as gambling because individuals are required to purchase a chance to win. Because sweepstakes require a free method of entry, the gambling classification is removed. (you can’t gamble for free!)
The primary benefit of avoiding gambling classification is that sweepstakes allow organizations to reach a vast audience because they have fewer geographical restrictions than raffles.
How many people use the free method of entry?
There are limitations in place, e.g., one entry per person, to prevent people from over-utilizing the free method of entry. In our experience, mail-in entries typically total less than one percent of the number of donation-based entries, and some sweepstakes receive no mail-in entries at all!
We find that most people are willing to donate to participate since the cause is charitable and that even those who enter for free learn about the organization and its cause.
How does it work?
In the official rules on the sweepstakes page is a link to the Alternate Method of Entry. To submit a free entry, people will need to locate the link in the rules, click on it and enter their email address. They will receive a form to fill out. The completed form must be printed and mailed to our office to be entered into the drawing.
If your organization is located outside of the US, we recommend that free entries be mailed to a local address to avoid a delay in the drawing date. You can update the mailing address on your sweepstakes free entry instructions by contacting our customer success team.
How does the free entry affect my campaign?
The alternate method of entry requirement impacts several aspects of a sweepstakes campaign.
1. Drawing method
The winning entries must be drawn systematically at random by MemberHub. There is no way for the organization to draw winners manually as is possible with a raffle.
Even though free entries are limited to one per person, the free entry receives the average number of entries donors have paid to enter the drawing. Calculating this by hand would be too complex and introduce the risk for human errors (which could make the drawing unfair). There is also no way to prove the drawing was done correctly should a gaming agency audit the drawing.
For the sake of fairness and simplicity, MemberHub:
- Uses a certified random generator to calculate the average number of paid entries.
- Assigns the average number of paid entries to each free entry.
- Runs it through the drawing process to select a winner.
2. Drawing date and time
All entries must be received or postmarked by the entry deadline date. To comply with the equal dignity clause, sufficient time between the “Stop selling entries date and time” and the “Drawing date and time” is required to allow the free entries to reach the MemberHub office and be entered into the drawing. For this reason, there needs to be a three-business day minimum between the entry deadline date and when the drawing occurs.
3. In-person entry sales are not permitted
Legally, the term ‘No purchase necessary to enter’ must be presented at the point of sale. This is easy to accomplish with online sales by posting this text on the fundraiser page. However, offering free entries when selling printed tickets in person is not feasible or enforceable to the point that it would be acceptable to regulators. As a result, online entry sales are the only method available on sweepstakes, and MemberHub does not support the sale of printed tickets.