Definitely a scam. Always a scam if it asks for money up front like this, and unfortunately they keep getting people to do just that, send in money.

http://www.consumeraffairs.com/news/lucky_day.html

"Legitimate sweepstakes don't require you to pay or buy something to enter or improve your chances of winning, or to pay "taxes" or "shipping and handling charges" in advance to get your prize."

http://www.fraud.org/

http://www.fraud.org/tips/telemarketing/sweepstakes.htm

"Never pay to play. It’s illegal for a company to require you to buy something or pay a fee in order to win or claim a prize."