A federal judge in Texas has ruled that Elon Musk must face legal proceedings over allegations that he conducted an unlawful election lottery connected to a $1 million-a-day giveaway.
The case centres on claims that Musk’s recent promotional campaign, which encouraged voters to sign a petition supporting the U.S. Constitution, was deceptively presented as offering them a chance to win a substantial cash prize.
Judge Robert Pitman, based in Austin, determined that the class-action lawsuit filed by Jacqueline McAferty of Arizona presented sufficient claims that Musk and his political action committee, America PAC, improperly persuaded participants to provide personal information in exchange for eligibility in the giveaway, which took place during the final months of the 2024 presidential election campaign.
Musk, a resident of Texas and CEO of Tesla, which is headquartered in Austin, created America PAC to aid Donald Trump’s successful 2024 presidential run. According to the lawsuit, America PAC targeted voters in seven pivotal battleground states, urging them to sign the petition with the promise that winners of the $1 million prize would be selected randomly, akin to a lottery.
However, McAferty contends that those who participated had little genuine chance of receiving the prize, and that the main purpose was to collect detailed personal data such as names, addresses, telephone numbers and email contacts.
Musk’s legal team sought to dismiss the claims, arguing the giveaway did not constitute an illegal lottery. They highlighted wording that described recipients as “selected to earn” money and expected to act as America PAC representatives, framing the payments as remuneration rather than prizes.
Nevertheless, Judge Pitman pointed to contradictory language used in promotional materials, which referred to the money as being “awarded” and able to be “won.”
He wrote, “It is plausible that plaintiff justifiably relied on those statements to believe that defendants were objectively offering her the chance to enter a random lottery—even if that is not what they subjectively intended to do.”
Appointed by President Barack Obama in 2014, Pitman also dismissed Musk’s contention that petition signatories were not harmed by handing over their contact information. The judge noted that experts on political data brokering could demonstrate the value of such information, especially in crucial swing states during tightly contested elections.
The case touches on the legal criteria for lotteries in the United States, which require the presence of a prize, chance, and consideration. If voters were induced to provide personal details (consideration) for an opportunity to win money by chance (prize), the promotion may breach federal and state lottery laws.
This lawsuit was filed on November 5, 2024, coinciding with Election Day, showing escalating scrutiny over election-related marketing efforts. A related case in Philadelphia earlier that month saw a judge reject a bid to stop Musk’s giveaway, after prosecutors failed to prove it was unlawful.
Neither Musk nor representatives of America PAC have issued statements following the ruling. The decision permits the lawsuit to proceed to discovery and possibly trial, where the legality of the giveaway will be examined in detail.