While they "technically" receive a donation from you and send you a gift, I think most judges would see an exchange of money for an item and say that somebody definitely is selling something.
I see it as a donation to an entrepreneur, artist, or other innovator.
I sometimes turn down the rewards. And I'm always offered the option to do so. Which means it's definitely not a normal for-sale arrangement. Who would order something from Amazon and then check a box saying, "Oh, just charge my card; don't actually send anything"?
Partially. I'm pretty sure if you write-off that donation you need to subtract the fair market value of that mug. A real accountant could speak better to that though.
As others have pointed out they are selling something. Nothing indicates that you can get the "thing" simply by sending an entry to the address and there is no obligation to buy anything. As happens with contests that don't want to appear to be a lottery. In other words you can't have someone pay for a chance to win something (in many legal jurisdictions particularly in the US not sure about anywhere else). But you can have people both buy things and enter with a very clear "no obligation to buy" as we have all seen (once again in the US).
So it is very clear and obvious that in exchange for paying money you are expecting to receive something in return.
Now of course they could probably work around this with the proper wording somewhere.
"We hope to produce this lightbulb. There is no guarantee we will succeed. Here is a complete list of our qualifications. Be aware that if we fail to deliver you will loose your money. Here is our record with other projects. Etc."
In that case the "game" becomes a little different and it is apparent and visible that you stand to loose just like paying to enter a marathon you pay money and are not guaranteed to win. (Not a great example but anyway..)
