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Are contests mandatory?

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No of course not, but they’re nice way of getting extra goodies that help your game if you take part in them casually and have fun on Howrse. If you’re the fierce competition type you can also have a go at getting the contest’s divine. And for those of you that aren’t as competitive, at the end of a contest, players who’ll have at least taken part up to the second golden horseshoe are all entered into a lucky draw with a chance of winning the contest's divine! You are of course free to ignore them and play as you like with your horses with no penalty. ;)