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I'm certainly not surprised at that example. If the contest requires you to link to the contest page and requires something like that with regards to anchor text, that's two reasons why it might...

What part of their guidelines indicates that holding a sweepstakes contest, photo contest, or video contest is something that a webmaster should not do?

I'd be interested in hearing more about websites that have been penalized for this. I agree with pokerfelts on most of this. I certainly wouldn't be surprised if Google's algorithms had interpreted a...