Legality Under Anti-Lottery Laws of Amendments to Simultaneous Oil and Gas Leasing Procedures


The amendment of the Simultaneous Oil and Gas (SOG) Leasing Procedures to clarify the discretion of the Secretary of the Interior to decline to award leases to applicants whose names are drawn under the SOG procedures, provides some additional support for the conclusion in the April 7, 1980, OLC memorandum that the SOG program is not a prohibited lottery within the scope of 18 U.S.C. §§ 1302 and 1304.

Serious legal difficulties would arise if the SOG regulations were amended to establish a multiple filing system which would give preference to those willing and able to pay the most for lease opportunities, because of the statutory requirement that oil and gas leases be awarded not to the highest bidder but to the first qualified person making application to hold a lease. Moreover, insofar as a multiple filing system would tax lease applicants by making their chances depend on the size of their payments, and potentially enrich the government, it might be considered a violation of the anti-lottery laws.

In the absence of a specific statutory limitation on the amount which may be charged each applicant for a lease, the Secretary is authorized to increase the present fee to a level that more accurately reflects the actual cost of administering the system.

Updated July 9, 2014