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So you’re curious about running a competition or giveaway for your business or brand, but you’re wondering what a competition actually is and what the difference between a competition, giveaway, contest and sweepstake is, exactly…

It’s an excellent question, in order to run a successful and effective competition, it helps to know what a competition is in the first place – so let’s find out.


What is a competition?

A competition is a set period of time in which those who wish to enter, must complete a set of predefined entry criteria or conditions in exchange for a fair and equal chance to win a prize.

OK, I know it’s kind of a wordy definition with a lot to unpack, so let’s break it down.


A key feature of a competition is that it has a set period of time that it is open to entries. Commonly we would refer to this as the competition period or the period between the competition open date and the competition close date.

This means you’ll need to decide, in advance, how long you will run your competition for rather than making it up on the fly or closing it when you have enough entries or get bored…

To run a fair and lawful competition, your competition terms and conditions must contain a start or open date and an end or close date.


In order to gain an entry into your competition, you will ask your audience to complete an action or multiple actions – such as visiting your website and entering their name and email address in a form.

There are a number of factors that will affect how you define your entry criteria or conditions, including what you want to achieve with your competition, what your chosen entry method is and where you host your competition.

Your predefined entry criteria (or entry steps) can be used throughout your competition promotion to help people understand how to enter your competition and maximise the entries for your competition. You will also include these entry criteria in your terms and conditions for your competition.


Whether you’re running a game of skill or a game of chance, this still applies.

It means that ethically and legally, you must treat all entries fairly and equally – no one comes into the competition with an unfair advantage and you haven’t already decided you’re going to award the prize to your best mate or favourite customer, for example.

Not only would it be incredibly unethical and dishonest to give some entrants unequal advantage over others, but it’s also illegal, so treat every eligible entry fairly.

“A competition is a set period of time in which those who wish to enter, must complete a set of predefined entry criteria or conditions in exchange for a fair and equal chance to win a prize.”
(Image shows Suki on a purple graffiti background with the above quote.)

OK, so now that we know what a competition is and how we define a competition, let’s look at some other common terms that are used interchangeably with or in the context of running a competition.

What is a giveaway?

A giveaway is when something is given away for free.

It can refer to promotional items such as t-shirts or USB sticks that are given away for free at events such as expos, often with no expectation of anything in return.

In the context of competitions, however, ‘giveaway’ is often simply used interchangeably as another word for ‘competition’. There’s no real definitive difference between a competition and a giveaway.

In Google’s dictionary definition of giveaway, they even use it alongside the word competition:

A screenshot of Google’s definition of a giveaway – ‘a thing that is given free, often for promotional purposes.’

When promoting a competition, often businesses will use both ‘competition’ and ‘giveaway’ to refer to their competition – for example ‘Enter our giveaway to win a custom pair of sneakers!’ or ‘Our custom sneaker competition is now open!’.

What is a contest?

A contest is an event where people compete, often using skill or talent, for the chance to win against others.

The term contest is most commonly used in America and Canada to refer to a competition where entrants specifically compete with others for a chance to win (for example to win a position, bragging rights or a prize).

In Australia we rarely – if ever – use the term ‘contest’ as we describe this type of competition as a game of skill, where entrants use their skill or talent in order to be selected (over others) as the winner of the competition.

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What is a sweepstake?

A sweepstake is when people enter to win a prize where the winner is decided by chance only, no skill or talent plays a part in the deciding or drawing of the winner.

As with the term ‘contest’ above, sweepstake is another competition term that is really only used in America and Canada and refers to a competition where the winner is decided by chance as opposed to skill.

Again, this term is rarely used in Australia, where we refer to these types of competitions as a game of chance, where the winner is picked entirely at random from all eligible entries and skill or talent plays absolutely no part in the choosing of the winner.

Why are competitions sometimes called ‘trade promotions’ or ‘trade promotion lotteries’?

A trade promotion, or trade promotion lottery, is a free to enter lottery used to promote a business’ products or services.

In Australia, competitions run by businesses are often referred to as ‘trade promotions’ or ‘trade promotion lotteries’ by the government organisations and departments that oversee the fair and legal running of these types competitions and issue the licences required to run them.

The term comes from the fact that it is businesses (or trades) that run these free to enter competitions specifically to promote their business (promotion) and the winners are usually chosen by chance (as they are in a lottery).

‘Trade promotion’ is a term that is used almost exclusively by the government licensing bodies and departments in Australia to refer specifically to games of chance rather than games of skill, as games of skill do not require a licence and are not usually considered lotteries as the winner is chosen based on the skill displayed, rather than at random from all eligible entries.

So now you know exactly what a competition is and the difference between competitions, giveaways, contests and sweepstakes as well as what constitutes a game of chance or game of skill. If you’re in Australia, you also know what a trade promotion or trade promotion lottery is… Now, the question is, are you ready to run a competition or giveaway for your business?!

If the answer is ‘YES!’ or even ‘yes?’ then you’re going to want to download your FREE Competition Kickstart Plan to help you get your competition ideas organised and start planning your giveaway.