Contest Reward Arbitrage

The speakers discuss various examples of contest arbitrage - finding and exploiting promotional contests and rewards programs where the value of prizes significantly exceeds the cost of entry. These opportunities arise when companies create promotions without carefully considering how they could be exploited.

Key Examples:

• College Contest Exploitation:

  • Won Stride gum "free gum for life" by submitting commercial when few others entered
  • Won Spicy Pickle mascot naming contest, received free sandwiches
  • Strategy: Enter contests requiring effort since most people won't participate

• Pudding Cup Airlines Miles Scheme:

  • Company offered 1,000 airline miles for every 10 pudding labels
  • Person bought $3,100 worth of pudding
  • Redeemed labels for 1.2 million airline miles
  • Profitable arbitrage between pudding cost and miles value

• The Hustle Newsletter Contest Learning:

  • Offered t-shirt for referring 10 subscribers
  • Got gamed by "sweepstakes community" websites
  • People created fake email addresses like "seanplus1@aol.com"
  • Had to implement double opt-in system to prevent abuse

Key Success Factors:

• Find contests with valuable rewards but high effort requirements
• Look for mathematical arbitrage opportunities
• Exploit poorly designed contest rules
• Focus on promotions where most people won't bother participating

The speakers note there's an entire underground community of "sweepstakes hackers" who systematically find and exploit these types of promotional opportunities.