Nontraditional (to say the least) game startup funding

I've been talking about how people deal with what I've been calling the Big Bet - that big initial investment required to get a game printed, before you know whether it will sell or how it will do.

Here's an example of somebody running into this issue, and then responding with a . . . lottery of some sort?  Delivered as some kind of chain-letter spam?  I wouldn't have thought this was legal, and it doesn't come with all of the usual legalese that comes with contests, like family members of employees aren't allowed to participate, odds of winning are XXX, etc.

This thing seems kind of off to me somehow, although the website has pretty complex flash design, and the whois record points to somebody with a matching name on a yahoo.com e-mail address, which lends an air of professionalism and sincerity, if nothing else. There's no detailed description of what the game's like, but it sounds pretty basic and potentially fun.

If this is legitimate, I doubt they'll raise much money, probably not enough to cover the $1,000 they offer in prizes.  But what do I know?  I guess people hold raffles at churches and school carnivals all the time without worrying about the legal aspects.