Dream Giveaways® are not considered gaming activities like a “Lottery” or “Raffle,” and here’s why.
An activity containing the three elements of prize, chance and consideration is defined as a gaming activity.
Prize: Anything of value, like goods and services with a monetary value.
Chance: A drawing where the participant has no control over the outcome. Usually, this is a random drawing where luck is the deciding factor.
Consideration: A participant is required to make a purchase, pay an entry fee, or expend significant effort to participate.
Lotteries and raffles contain all three of these elements and therefore are regulated under gaming guidelines determined by each State.
Contests contain two of the elements, prize and consideration, but not chance because the winner is chosen by judging or voting.
In our case, all Dream Giveaway promotions are considered giveaways, sweepstakes, or drawings because they contain only two of the above elements, prize and chance. The element of consideration is not a requirement to enter any Dream Giveaway because there is an alternate free method of entry (see Official Rules.) As a result, Dream Giveaway promotions are not considered a gaming activity in any State, and entries accompanied with a payment to the Sponsor 501(c)(3) charity are considered tax-deductible donations.
The winner of a Dream Giveaway will have the fair market value of the grand-prize submitted to the IRS on form 1099misc, whereas income from gaming activities like a lottery or raffle are submitted on form W2G.
All Dream Giveaway promotions undergo an annual audit for compliance with state and federal promotions law by one of the nation’s preeminent promotions law firms.