SOURCE: Reuters

LOS ANGELES - Last week's U.S. election shake-up will put pro-casino politicians in key leadership positions as the American Gaming Association mulls a push to study legalization of Internet gambling, the head of the trade group said on Tuesday.

"I think the change on balance is positive," said Frank Fahrenkopf, president and chief executive of the gambling association and a former chairman of the Republican National Committee.

He said that a major challenge of the trade group has been educating legislators about the business, and "the new leadership is familiar with our industry."

Sen. Harry Reid, a moderate Nevada Democrat and former casino regulator, was elected by colleagues on Tuesday as U.S. Senate majority leader for the 110th Congress that will convene in January.

"He probably knows our industry better than anyone," Fahrenkopf said.

The new Republican leader in the Senate is expected to be Mitch McConnell of Kentucky, a "gambling state" in Fahrenkopf's words.

Sen. Trent Lott, a Republican from Mississippi, where casinos dot the U.S. Gulf Coast, is angling for the job of assistant minority leader in the Senate.

In the House, there will be "dramatic changes in committee chairmanships," Fahrenkopf said.

Rep. Charles Rangel, the New York Democrat expected to chair the Ways and Means Committee, has been to Las Vegas to tour the inner workings of casinos "many, many times," according to the head of the gaming association.

Rep. John Conyers, expected to head the Judiciary Committee, is from Detroit, where he has seen "how casinos can benefit the economy," Fahrenkopf said.

He also noted that Bennie Thompson, expected to chair Homeland Security, is from Tunica, Mississippi.

And Massachusetts Democrat Barney Frank, who is expected to chair the Financial Services Committee, has a libertarian approach to gambling and does not believe that the U.S. should be telling people how to spend their money, Fahrenkopf said.

The Gaming Association is expected to decide in December whether to pursue legislation calling for an independent study of online gambling.

"We think it might be time to see if there is a way to regulate and control online gaming," Fahrenkopf said.

The arrests in the United States of executives from British companies involved in online sports betting and passage in October of a U.S. law barring banks from transactions involving Internet gambling have led most legitimate operators to pull our of the U.S. market, he said.

"The goal was to protect U.S. consumers, but I think the impact has been the exact opposite. The responsible companies have pulled out, only leaving about 2,000 fly-by-night Web sites," Fahrenkopf said.