The prize-based thing is quite common in some countries, for instance https://en.wikipedia.org/wiki/Premium_Bonds (in countries which don't tax gambling winnings, it's a tax dodge; if you have a choice between a bank account that pays 4% taxable interest or a prize bond scheme which in the long term pays an average of 3.5% in untax-able winnings, you might take the prize bonds.)

I'm not sure that it should necessarily be seen, in _itself_, as a major red flag.