Single post in Contests & Artists' Rights

So question about this, and maybe it's already been answered but in different wording. Ive seen a contest that is "make me a new OC" one of the rules is: "Even if you dont win I gain ownership to the character." Is this still allowed or is this breaking the rule? I mean, they never said they would claim the art as their own but basically the artist is losing their design(unable to use it themselves) without winning a prize.