The slightly unhelpful answer is "they can be".

I've worked with some quite big rewards sites in the past and done a lot of work around policy for them so I am quite confident in this. In very general terms, there are three main issues to consider:

1. Compliance with incentive policies
The main pitfall here is if you start rewarding the visit or ad view, rather than something that requires a visit. It's a fine line, but one that Google are very strict about enforcing. If you start rewarding pageviews/impressions/clicks it can get serious quickly. This isn't always as obvious as it looks either so really consider each rewards opportunity that you offer.

2. Inviting bad behaviour
I've seen policy compliant rewards seemingly encourage invalid behaviour by accident. An extreme example of this one one rewards site that the users loved so much that they would "click a few ads to help them out" every time they used it. Nothing on the site encouraged this in any way, but it caused a huge issue with invalid traffic for them.

3. Even if you don't do either of the above, it might look like you do
Policy team have to make decisions quickly. If your site looks like a lot of other sites that do break policy then you might be the "baby who gets thrown out with the bath water". There were a spate of free draw sites a few years ago that were all getting denied because they used language like "lotto" and "lottery". You might be able to argue the case that you are not what they think, but only if you can get a platform to actually talk to someone.

I hope that helps. Happy to try to answer followups.

Thank you so much for that insightful reply, that does explain a lot and at the same time makes me completely sure I have 0% chance of getting approved with my current website, specially since it is ranking and I can't just swipe out content/rewards temporarily and retry applying without any of that.

I have two questions:

1) Do you think creating a new domain, turning that domain into a blog, getting that domain approved on adsense and then turning it into the rewards site (while holding all articles, content and the blog aspect as well), would work long term? Or would I lose my adsense account after they realize what I did?

2) Is it a waste of time from my part to keep reapplying on this already marked and denied domain? Since I suppose there are no chances of getting it approved no matter if I improve x or y area of the site, as long as it is a rewards website.

To elaborate: My website includes the "Earn" section, which has all the offer walls available and takes a user to a different site where they pick what offer/survey they want to complete, and, besides from that, the other sections are referral section, giveaways section (users enter a captcha every half an hour to participate on it, it runs every half an hour and picks one random winner and credits that user the prize), so there's no encouragement for users to navigate multiple pages in order to receive a reward.

1) I see lots of people do this. It certainly works in terms of getting a site improved, but there are risks. At that point you are building your business on a very rocky foundation. What would be your plan if your account got terminated a year down the line (taking the account balance with it)?

2) It's definitely more difficult to get a rejected domain approved than a new one. You'll have to weigh that up for yourself. It might be worth working with a GCPP and trying to do it through adx as the application process is far less automated for that. However, if the domain is flagged the partner will likely have to put in a lot of leg work (I'm doing this for a rejected domain at the moment). Unfortunately I don't think you currently have the traffic to work with OKO, but other partners have different entry requirements. To reiterate though: rewards sites are not against policy in themselves.

Another option would be to really pair it back. Remove anything borderline if you can, build out the safe content and try to get approved, Likewise, de-monetising riskier content might help.

Good luck