Earlier quoted context omitted.
As mentioned, this is only asked of winners to collect their prize, after the draw. If they won they must be contacted to verify and get info to send them the prize. Since it is a transfer of value, the SSN has to be known for the 1099 form that is required by the IRS after $600 in value being transferred. It is also required if the sponsor gives it as a gift, pays the tax portion and for the sponsor to expense it ou…
The solution I came up with is to have the winner come into a store location to claim their prize. They can see their brand new motorcycle, be told that to drive this away we need to report the gift to the IRS so they can collect their cut. I think most people will give up the digits then.
Lots of people just didn't believe it and thought it to be a scam or maybe denied it due to the taxes, or maybe they were trying to stay on the down low due to collections or something who knows. For whatever reason, they didn't want the prize or didn't believe it.
Since it wasn't a cash prize in most cases, people would have to pay some taxes on it so maybe they didn't think it was worth it. Cash prizes are always easier as the person can just pay the taxes out of the prize, a product like a motorcycle or something fairly big, they would have to sell to pay taxes maybe.