California is set to pass new legislation that would make online gambling legal in the state. California has a reputation for path breaking legislation that often bucks the federal trend and this latest move is in keeping with that tradition.

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The legislation however threatens to put the state on a collision course with federal authorities who are committed to ensuring that online gambling stays illegal.

In 2006 the federal government passed The Unlawful Internet Gambling Enforcement Act which made online poker illegal. Thereafter for almost three years there was no full-fledged effort to apply the law in practice. Suddenly, in April this year the Department of Justice cracked down without warning on the major internet poker sites and seized their domain names and associated assets. Since then a very lively debate has broken out on the wisdom of the legislation and on how the interests of all parties concerned could be protected if the government were to take a more practical and balanced approach to the problem.

Any legislation that California might pass sanctioning online gambling is sure to add firepower to the pro online gambling lobby that is made up of a motley collection of poker players, proponents of personal freedom and of course the online casinos themselves.

As yet, federal authorities have not made any official statement about their position on California’s proposed law. This silence has led people to speculate on how things would pan out if the state were to actually go ahead and pass such a law.

California has by far the biggest economy of all the states in the Union and contributes a whopping 13% of the nation’s Gross Domestic Product. The state however has budget deficit of more than $26 billion for 2009-2010. The move to legalize online gambling is therefore a hard headed measure to tap a potentially huge source of revenue for the state. According to State Senator Lou Correa, if online poker was legalized it could fetch the state’s coffers almost $1.4 billion over the next ten years and also create about 1,300 jobs.

The news has been received enthusiastically by the online poker playing community with some prominent players vowing that they would move to California if such legislation did become reality. California however is not the only state with such plans. A bill was introduced in the Massachusetts State Assembly this year that seeks to permit a limited number of online poker companies to operate legally in the state.

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