The bill would "establish a framework to authorize intrastate Internet poker …” and "authorize eligible entities to apply for a 7-year license to operate an authorized poker Web site offering the play of authorized Internet poker games to registered players within California.”
Similar to other bills introduced in the past ten years relating to online poker in California, AB 1677 will only allow state card rooms and tribal gaming operators to apply for a license to offer online poker to residents of the state. A US$ 12.5 million fee will be charged to successful applicants, while the license will cover seven years of operations. The upfront fee will be credited against future tax fees.
Online poker operators will pay taxation according to the revenue they generate over the period of a year from their ipoker platforms. Should these operators earn less than US$ 150 million, they will charged a fee of 8.8%, while those who earn between US$ 150 million and US$ 250 million, will need to pay a higher rate of 10% tax. Annual revenue of between US$ 250 million and US$ 350 million earns the state 12.5% in tax, and any operator that earns over US$ 350 million will be required to pay 15% tax.
Opponents to the bill point out that there is a very small chance that California will even make more than US$ 60 million from online poker per year, and therefore there is no logical reason to push for AB 1677.
