Judge explains why he handed Elon Musk his $1 million-a-day sweepstakes win

Tesla CEO Elon Musk. Steve Granitz/FilmMagic via Getty Images

• A Philadelphia judge has explained why he didn't shut down Musk's $1 million-a-day sweepstakes.
• Pennsylvania officials had called the program an illegal lottery in seeking to halt it immediately.
• The decision would help Musk and his America PAC move for outright dismissal of the lawsuit.

Elon Musk's controversial $1 million-a-day swing state sweepstakes was never a lottery, a Philadelphia judge said in a written decision explaining why he declined to shut the program down after a hearing last Monday.

Philadelphia County District Attorney Larry Krasnersued Musk and his super PAC over the giveaway last month, saying it was an unregulated and illegal lottery.

In a written decision issued Tuesday night, Judge Angelo Foglietta of Philadelphia's Court of Common Pleas said that Musk's giveaway failed to meet any of the three criteria required for a lottery under Pennsylvania law.

Lotteries require a prize, a payment for a chance to win that prize, and for winners to be chosen at random, the judge said.

Testimony and evidence from last week's hearing showed instead that participants did not pay for the chance to enter the sweepstakes, were carefully selected before winning, and received their $1 million windfalls as compensation for working with the PAC, not as a lottery prize.

Musk had repeatedly explained online and at rallies that those chosen to receive $1 million during the 18-day giveaway were being asked in return to be spokespeople for America PAC, the judge wrote.

The PAC's treasurer "testified credibly when he stated that those selected to earn the one million dollars were selected by the organization in a multi-step process that involved looking at their public posts on social media and meeting them in person before the town hall events to make sure their personality would be a good fit for the role," the judge wrote.

"Credible testimony also established that those selected were not determined by chance and Petitioner agreed that a lack of random selection is not a lottery," he wrote, referring to last Monday's hearing.

Recipients signed contracts in which they agreed to represent the PAC at political rallies and online promotions in return for receiving their $1 million by November 30, according to evidence and testimony from PAC officials who took the stand at last week's hearing.

Participants entered the sweepstakes by signing a pledge of support for free speech and gun rights, for which they received cash payments of between $47 and $100 plus a daily chance to receive $1 million.

The sweepstakes was open only to registered swing state voters, leading to criticism by the Department of Justice and some Democrats, who accused him of paying people to register to vote.

Lawyers for the Philadelphia DA's office and the DA himself had argued last week that Musk said participants would have 18 daily chances to "win" $1 million windfalls, which he said would be "awarded" at random.

"We're gonna be awarding a million dollars, randomly, every day from now until the election," he had said in announcing the rally on October 19.

On Tuesday, Musk was served in Texas with an Arizona woman's lawsuit alleging that the program was a fraud because would-be participants were not told that winners would be chosen through a vetting process.

"Defendants' representations were false because they have since admitted that the winners were pre-determined," the lawsuit said.

Musk's super PAC had spent more than $152 million supporting President-elect Donald Trump's campaign, along with another $19 million boosting GOP candidates in House races, according to the latest fillings.

Krasner's lawsuit remained on the court docket Wednesday. Representatives for Krasner, Musk, and the PAC did not immediately respond to requests for comment on the judge's decision and next steps in the case.

If you enjoyed this story, be sure to follow Business Insider on Microsoft Start.