Some people use the two terms
interchangeably, but there is actually a large difference
between the two.
In a contest, you might be evaluated based on an essay, a
cheesecake recipe, or some kind of design. A panel of judges
makes a subjective determination based on the judging criteria
outlined in the fine print.
In a sweepstakes, luck takes the place of talent. All entries
are given equal consideration and tossed into a random drawing.
According to the many state and federal laws, charging money for
a sweepstakes entry would classify it as a lottery, and that is
usually illegal, unless it is being sponsored by a state
government. Contests, on the other hand, can charge an entry fee
since there is a degree of skill involved.
In 2006, the CVS pharmacy chain was ordered to pay $152,000 in
civil penalties in New York after they promoted a “sweepstakes”
in which entries were automatically submitted for customers
buying Nicorette gum; the chain did not make the offer available
to people who did not buy the product making it no equal consideration.