No. You don't need to have a copy of the game in your Steam game library yourself. You can purchase it in Steam giftable copy form or Steam redemption key form after the giveaway is created to be gifted to the giveaway's winner after the user is selected if you want.
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In your library? No. In your inventory (or a key), so you can actually give the game to someone? Yes.
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Well, the game will be given to the winner by you, not by Steamgifts, if that's what you mean.
You will need to provide the game to the winner, whether it's a giftable copy from your inventory (not one that's already been added to your library), or a key from somewhere like Humble Bundle, or Green Man Gaming, which hasn't been used yet.
Hope that helps :)
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Do i need to own a game that i want to create a giveaway?
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