Elon Musk and his political action committee, America PAC, have reached a settlement regarding two proposed class-action lawsuits that accused them of misleading voters in key battleground states ahead of the 2024 US presidential election. This development was reported by Reuters. The allegations claimed that Musk and America PAC deceived registered voters with promises of a lottery-style giveaway of $1 million daily, aimed at gathering signatures for a petition supporting the US Constitution.

On Thursday, both the plaintiffs and legal representatives for Musk and America PAC informed the federal court in Austin, Texas, of their agreement to settle the lawsuits, pending final court approval. However, the court documents did not reveal any financial or non-financial terms of the settlement, and attorneys for the involved parties either declined to comment or did not respond to requests for further information, as reported by Forbes.

Core Allegations in the Lawsuits

The lawsuits, led by residents of Arizona, asserted that Musk and America PAC misled voters across seven pivotal swing states: Pennsylvania, Georgia, Nevada, Arizona, Michigan, Wisconsin, and North Carolina. The plaintiffs contended that the promise of a daily $1 million prize for randomly selected participants was a deceptive tactic to encourage voters to sign the petition. They claimed that the winners were not chosen randomly from the pool of signatories, undermining the integrity of the lottery.

Musk and America PAC had previously denied any wrongdoing in connection with the allegations. The settlement effectively avoids a potentially complex legal battle for Musk, especially after a federal judge ruled in June that he would be required to testify in the ongoing lawsuits.

According to reports from the Austin American-Statesman, a total of 18 individuals received the $1 million payout during the lead-up to Election Day in 2024, as the daily sweepstakes unfolded across the battleground states.

Legal and Political Implications

Musk established America PAC to support Republican Donald Trump’s successful campaign for the 2024 presidential election. He reportedly contributed over Rs 1,600 crore to support Trump through America PAC and another affiliated committee. The $1 million daily sweepstakes, which was introduced shortly before the election, attracted significant legal scrutiny, with election law experts suggesting that it might violate federal regulations prohibiting payments or offers of payment to encourage voter registration or ballot casting.

In defence of the payouts, representatives for Musk claimed that the recipients had been vetted and selected to act as paid spokespeople for America PAC, arguing that the $1 million was intended as compensation rather than a lottery prize. Furthermore, the US Department of Justice had cautioned America PAC that the sweepstakes could potentially contravene federal law, with possible penalties including fines up to $10,000 and prison sentences of up to five years.

Musk has continued to invest heavily in Republican politics, with over Rs 2,200 crore allocated for the 2026 US midterm election cycle. His financial contributions have solidified his status as a significant player in American conservative campaigning. As per Forbes, Musk’s estimated net worth stands at $924.8 billion, maintaining his position as the world’s richest individual, having frequently crossed and hovered near the historic $1 trillion mark.

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