A paper wallet might be a simple work-around, but than you have to trust the paper wallet creator not to copy/steal the keys they are creating and giving away as a prize. I think I see your purpose more clearly, which is how do you create a funded wallet through a smart contract, where only the winner would be able to access the funds. This might be easy on a small scale with relatively trusted participants, but if it becomes a multi-million $ lottery, than potential issues I see here, are what if the new winner immediately looses access to the wallet through some user error and locks the ada for good. (good for the rest of the community lol) If the winner doesn’t know how to manage their new wallet, it would be almost like burning tokens, locking them away. Also, how exactly do you transfer the new wallet keys securely? email? Wouldn’t this expose the wallet to potential future attacks? This type of use case of bringing in someone from off chain and just giving them a secure wallet without them having to create it, or understand how it works appears to have some security challenges. Maybe a third party like the cardano foundation, or an exchange like Binance would have to be involved with the wallet handover?
Several logistical/technical/security problems may be resolved if the participants were required to create their own wallet as a requirement prior to entering the lucky draw. Once the participant creates their own wallet, their public address is entered into the draw.