The US Department of Justice (DOJ) has sent a letter to Elon Musk’s political action committee warning that his $1 million a day lottery payout to a registered voter is illegal, according to US media.
Republican Donald Trump is campaigning hard in his presidential bid against Mr Musk, the world’s richest man, and Kamala Harris.
Over the weekend, Tesla and X/Twitter owners began offering gifts to US voters who signed the petition.
It’s unclear when the DOJ letter was sent to Mr Musk’s organization America PAC. DOJ investigators declined to comment on the case.
American outlets, including the BBC’s American partner CBS News, reported on Wednesday that the letter told Musk’s team that the payments would violate federal election laws.
It was sent by the DOJ’s Public Integrity Division following outrage from Democrats over the money stunt.
Under US law, paying people to register to vote is illegal. But it’s unclear whether the sweepstakes violates any laws.
Mr Musk’s campaign is offering money to signers of a petition distributed by the PAC.
“We want to try to get over a million, maybe 2 million voters in the battleground states to sign a petition in support of the First and Second Amendments,” Mr Musk said as he announced Saturday’s event in Pennsylvania.
Contest rules state that winners must be registered to vote, but no party affiliation is required.
“We’re going to give out approximately $1 million (£770,000) every day from now until the election to people who sign the petition,” he said.
The America PAC website says it’s getting “1 million registered voters in swing states to sign in support of the Constitution, specifically the right to free speech and bear arms.”
It is open to voters in seven swing states: Pennsylvania, Georgia, Nevada, Arizona, Michigan, Wisconsin and North Carolina. US Election Day is November 5th.
On Tuesday, a group of Republican former prosecutors wrote to the DOJ urging officials to investigate the match.
“We are not aware of anything like this in modern political history,” they wrote, pointing to potential federal and state law violations.
“Law enforcement agencies are reluctant to take action just before an election, which could affect the way people vote. But serious questions arising under laws that directly regulate the voting process should be an exception.”
Mr Musk has previously rejected claims the competition is illegal, saying: “You can be in any political party or in any political party and you don’t have to vote.”
On Sunday, the contest redrafted its rules, according to CNN, describing the money as a reward for work.
America PAC said the winner “will be selected to earn $1 million as a spokesperson for America PAC.” Winners filmed pro-Trump videos.
Several legal experts have told the BBC they believe the competition is illegal.
“His offer is only open to registered voters, so I think his offer violates this rule,” said Paul Schiff Berman, a law professor at George Washington University.
He pointed to the U.S. Code of Election Law, which states that “any person who pays or offers to pay money for registering to vote or voting” faces a $10,000 fine or up to five years in prison.
Aadhav Noti of the nonpartisan Campaign Legal Center said Mr. Musk’s plan “violates federal law and is subject to civil or criminal enforcement by the Department of Justice.”
“It is illegal to make payments conditional on recipients registering as voters,” Mr Noti told the BBC.
But Jeremy Paul, who teaches law at Northeastern University, said Mr Musk may have found a legal loophole.
While there is an argument that the offer is illegal, he believes it is “targeted and designed to get around what should be the law” and that it would be difficult to file a case in court.
