Federal Judge: Fraud Lawsuit Over Elon Musk’s $1M “Lottery” Can Proceed

A federal judge decided not to dismiss a fraud lawsuit against Elon Musk and his America PAC over the billionaire’s controversial $1 million election giveaway. $1 Million a Day to Random Winners? US District Judge Robert Pitman in Austin, Texas, on August 18 denied summary judgment to Musk and America PAC on a fraud claim brought by Arizona resident Jacqueline McAferty. The case stems from an unusual promotion launched by Musk and America PAC before the presidential elections in 2024. The promo offered registered voters in seven swing states the opportunity to possibly win $1 million a day. Musk publicly said the recipients would be selected “randomly.” To participate, people were required to provide personal information and sign a petition supporting free speech and gun rights. The promotion later came under legal scrutiny after the Philadelphia District Attorney’s Office sued Musk and America PAC, alleging that the giveaway amounted to an illegal lottery. That case ultimately provided evidence about how the $1 million recipients were actually selected. Judge Pitman: “Far from Random” According to evidence presented in the lawsuit, the recipients were not selected randomly. Musk’s attorney, Chris Gober, previously acknowledged that the $1 million recipients had been selected in advance based on their suitability to act as America PAC spokespeople. He argued that the payments were not lottery prizes but compensation for individuals who signed contracts and performed services for the political action committee. McAferty and another Arizona resident, Joy Harvick, subsequently filed proposed class actions accusing Musk and America PAC of misleading voters into providing their personal information by suggesting they had a genuine chance of winning $1 million. McAferty claims she would not have participated had she known that the recipients were not actually chosen at random. Judge Pitman adopted a recommendation from US Magistrate Judge Susan Hightower, who found that there were genuine disputes over whether Musk’s statements about the selection process were misleading. Musk and America PAC argued that the word “randomly” was too vague to determine whether the statement could be proven true or false. Pitman rejected that argument, finding that a jury could reasonably conclude that the selection process was not random, pointing to evidence that potential recipients underwent an ideological vetting process designed to identify people aligned with America PAC. The process reportedly considered factors including criminal history, age, marital status, children and social media activity. Pitman said a jury could conclude that such a process was “far from random.” The judge also found there was sufficient evidence for a jury to consider whether Musk knew the recipients would not be randomly selected, or whether he was at least reckless when making the claim. Evidence cited by the court indicates that Musk was involved in high-level discussions about establishing America PAC and discussed the concept behind the $1 million spokesperson program with PAC officials. The ruling does not determine that Musk committed fraud, but it instead means that McAferty’s fraud claim has enough factual support to continue rather than being dismissed before trial. However, Pitman dismissed McAferty’s breach of contract claim with prejudice, agreeing that the promotion did not create an enforceable contract.