Given the vast array of financial issues facing the Obama Administration, legalizing online gambling as a means to levy new government income is probably low of the list. The question is, however, is it “low” as in the very bottom, or “low” as in on the radar in the minds of government officials, looking for a convenient moment to overturn UIGEA?

According to a British firm, H2 Gambling Capital, legalized online gambling could create up to 32,000 jobs, plus an estimated $57.5 Billion in additional tax revenues over a 5 year period. No, we didn’t make a typo: that’s $57.5 billion in cold hard cash that is desperately needed by the USA government, already troubled with a staggering budget deficit. For more on the H2 Gambling Capital Article – Click Here.

In fact, online gaming does have a few friends in high places. Barney Frank, D-Massachusetts and Chair of the House Banking Committee, is currently one of the most outspoken proponents of legalized online gambling. His bill, HR2267, is an attempt to craft new legislation that would literally open the floodgates in terms of new jobs and high technology industry. Meanwhile, fellow congressman Jim McDermott is putting together a complementary bill that would allow the government to tax online gaming, thereby creating the $50 billion or so in new income estimated by the H2 Capital Group.

The question is, what kind of coalition would be needed in order to get such legislation moving, and most importantly, ultimately made into law? From our perspective, the most important constituency for a push towards legalized gambling would be President Obama and other Executive Branch officials. Per the Constitution, the President must sign any and all new legislation into law, and it stands to reason that starting with Obama and working backwards towards the legislative arm of the government might be the way to go. Once the Administration is on board, the real battleground would be in the Congress.

Many have been leaning on both the House and Senate financial committees for new ideas that could make the government money; and it stands to reason that members of these committees would be open to considering legalized online gaming. It’s likely that Frank could get the initial legislation written, through his committee, and onto the floor of the House without too many issues. Once out of committee, however, Frank and other leaders would have to make a lot of phone calls to get fellow Democrats on board, not to mention a few moderate Republicans who are pro-business, but also pro-Federal government.

Given the current makeup of the Senate and House, it wouldn’t be hard to move online gambling legislation through. The devil is in the details, however, and the most important detail would be the timing of such legislation. If the Democrats have a rough time in November 2010 during the mid-term elections, pro online gambling groups might find it more difficult to get new lawmakers on board, especially if those new lawmakers are hard and fast Republicans, championing family values and laissez faire economic policies. Moreover, Frank would have to maintain his seat in the House and not get bounced out by a conservative backlash in Massachusetts, which isn’t a remote possibility given the fact that Republican Scott Brown landed Ted Kennedy’s old senate seat.

In sum total, it’s hard to turn away the thought of $57.5 Billion in new revenues. This money is sorely needed, to say the least. The trick would be garnering support from the public and President Obama, and making it a priority to pass new online gaming law as soon as possible. That means it would most certainly have to move up “The List” of possible new revenue streams in short order.

If and when HR2267 is passed, the online gaming industry would be a new Goliath, with the likes of many land based casino operations jumping into the market right away. As a result, offshore casinos would either have to adapt or die, since it would be tough for even the savviest of non-USA online gambling operations to compete against behemoths like Harrah’s, Wynn Resorts, or Foxwoods.

In the meantime, if you believe legalized online gaming is good idea, drop your Congressperson a line. Every little bit helps, and politicians almost ALWAYS want to do what their constituents want in order to get elected again.

Good Luck from!