On November 2, 2001, Gallagher was appointed Deputy Assistant Secretary of Commerce for Communications & Information (NTIA) and on October 14, 2003, he was appointed Assistant Secretary for Commerce and Information via a recess appointment, bypassing Senate approval. He was later confirmed by the Senate on November 20, 2004 and left the Commerce Department in 2006.[10]
On May 17, 2007, the Entertainment Software Association (ESA) named Gallagher as their 2nd president, replacing founder Doug Lowenstein.[11] He stepped down in October 2018 following an internal investigation led by Robert Altman and Phil Spencer, then the chair and vice-chair of the ESA's board of directors, respectively.[12][13] In 2019, Variety reported that Gallagher had lost the confidence of the board over a number of related issues in the preceding years. His office was characterized as a toxic work environment in which he pitted his subordinates against each other and sent them belittling messages. He also fired an experienced high-level employee in favor of a new employee he preferred. With the 2016 election of Donald Trump, Gallagher attempted to publicly align the ESA with Trump's policies, such as the Tax Cuts and Jobs Act of 2017, which was unpopular with members of the association. These issues eventually led to the investigation and his ouster.[13]
Following his ouster, he founded a consulting firm for technology startups in 2019. In 2022, Gallagher took over as President & CEO of the Washington Policy Center, a conservative think tank in Washington state.[14] He also serves as Chairman of the US Board of Advisors for NTT Docomo.[citation needed]
In March 2022, Gallagher took over as President & CEO of the Washington Policy Center, the leading free market think tank in Washington State.