California Assemblyman Adam Gray is working diligently to try and get online poker regulated in 2016.

Recently, news surfaced that a completed version of bill AB 2863 could be ready for a review by the Assembly Appropriations Committee by June 15.

Gray is trying to make California the fourth state in the U.S. to regulate online poker but issues surrounding taxes and bad actors remain.

Tribes Favor a 10% Tax Rate

Gray has been in meetings with Tribal leaders on a regular basis and a tribal official recently spoke with regarding proposed taxes for online poker.

Speaking on a condition of anonymity, he revealed that some believe that taxes should be no more than 10% of gross earnings.

Believing that the industry won't earn more than $310 million annually, they believe that a 10% rate is a feasible figure.

However, a lobbyist for the Viejas band of Kumeyaay Indians believes that the Appropriations committee is going to seek a tax rate of at least 20%.

Bad Actor Clause Will Likely Be a Make or Break Matter

Not to sound like a broken record, but the bad actor clause or 'suitability language' as it is now being referred to, will likely be what either blocks or allows this bill to move forward.

However, there may be a bit of wiggle room for this. Before, it seemed that tribes only wanted PokerStars to be outright banned from participating in California iGaming.

Now it seems that some type of limitation may be acceptable, at least based on comments from one stakeholder.

According to Steve Stallings, the Chairman of the CA National Indian Gaming Association (CNIGA), Assemblyman Gray "needs to craft a bill that somehow restricts PokerStars and Amaya but at the same time allows them to apply for a license."

Stallings is also a councilman for the Rincon Band of LuiseƱo Indians, an ally of PokerStars in its fight to offer iPoker in California.

Rincon was among those that changed their position regarding bad actors last year and stated they should be allowed.

Now that they are showing some willingness to be limited, this could be a point of compromise for other parties.

The coalition headed by the Pechanga are looking for strong bad actor language in the bill but may be open to some type of short-term ban or limitation placed on Amaya.

In the past, we have called on a possible short term ban for PokerStars, specifically a five-year ban starting the day that iPoker is launched in California.

Furthermore, we believe that PokerStars should be prohibited from using their client databases from pre-Black Friday or they need to turn those databases over to other prospective operators to allow them the chance to also market to them.

If a suitable compromise can be reached on this bill by tribes, we could finally see real movement and an actual floor vote on the matter.

Should such a compromise not happen by late June or early July, expect this process to start all over again in 2017.