There are a lot of differences between a challenge and a tournament, the challenges offered or run in casinos don't require you to pay anything to join, all you need is complete a specific task like wagering or something, and you will make it to the list of the users participating in the challenge, while in a tournament, you might need to pay some fees to join so that you can win a prize if you can manage to make it to the final or win it.
By its terminology, yes both are different but practically both challenge and tournament can be the same depending on which terminology is chosen by the casino. Casino may use challenge/tournament or other terminology such as races or contest or competition. The true difference will be once we know the rules. Challenge might require player to pay a fee but it is rare, and tournament might not require you to pay fee as well.
And, in challenges, you are not asked to play games at a specific time or with a specific bet or something, you are free to gamble the way you like, they might want you to play a specific game but you decide the bet size and stuff yourself, but in a tournament, you are supposed to play a specific game at a specific time with a specified bet amount from them.
Again, its all about the rules. Challenge might give rules such as specific game to play, minimum bet to be eligible as well as time period for the challenge. On the other side, tournament can also not limited to one specific game only. However, challenge is usually related to one specific target such as multiplier or number to hit.
