Musk announced earlier this month that he would randomly award a $1m prize to people in battleground states – Pennsylvania, Georgia, Nevada, Arizona, Wisconsin, Michigan and North Carolina – every day until 5 November.
These swing states suggest a particularly close contest between Trump and his Democratic rival for president, Kamala Harris.
To be eligible to win, the giveaway requires registered voters to release personal identifying information, like addresses and phone numbers. They are also required to sign a pledge that says they support the US Constitution.
The lawsuit filed against Musk claimed he was “running an illegal lottery”.
“America PAC and Musk are lulling Philadelphia citizens… to give up their personal identifying information and make a political pledge in exchange for the chance to win $1 million,” Mr Krasner said in the lawsuit. “That is a lottery. And it is indisputably an unlawful lottery.”
The lawsuit also accuses the Tesla co-founder of violating consumer protection laws by using “deceptive, vague or misleading statements” that could create confusion.
But Musk’s lawyers have argued otherwise.
“The complaint, in truth, has little to do with state-law claims of nuisance and consumer protection,” Musk’s lawyers wrote in federal filings, according to the CNN report. “Rather, although disguised as state law claims, the complaint’s focus is to prevent defendants’ purported ‘interference’ with the forthcoming federal presidential election by any means.”
If matter does move to the federal court, the case would move out of the Philadelphia judge’s hands.
The BBC reached out to Mr Krasner for comment.
Before the case was filed, Musk’s PAC was also warned by the US justice department that its lottery-style giveaway might violate federal election law.
The BBC has previously reached out to America PAC for comment.
Under US law, it is illegal to pay people to register to vote. But legal experts have told the BBC that whether the giveaway violates federal law is a grey area.
Musk himself, who has been aggressively campaigning for Trump, has insisted voters who want to be eligible for the prizes do not need to register as Republicans or go ahead with casting a vote.
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