NBC News reviewed a dozen NIL offers to high schoolers described by legal experts as predatory. Some included 40% commissions and contracts packed with legal traps. Here are the 10 red flags that appear most often — and what good language looks like instead.
NIL rules vary wildly from state to state. Some states have strict guardrails. Others have almost none. This guide breaks down where each state stands and what it means for your family.
When the NCAA opened the door to Name, Image, and Likeness compensation in July 2021, it didn't create a uniform system. Instead, it left regulation to individual states. The result is a patchwork of laws that vary significantly in what athletes can do, how much they can earn, and what protections exist for families.
As of 2026, more than 30 states have passed specific NIL legislation. The remaining states either rely on the NCAA's interim policy or have executive orders in place. For families evaluating college programs, understanding the NIL landscape in a given state is as important as understanding the athletic program itself.
Several states have gone beyond simply allowing NIL deals. They've built frameworks that protect athletes from exploitation:
Not every state gives athletes a free hand. Some have imposed significant limits:
No state currently caps how much an athlete can earn through NIL. However, states differ in how they treat compensation structures. Some states explicitly allow pay-for-play-adjacent arrangements (where boosters fund NIL collectives tied to athletic performance), while others have moved to restrict them.
The NCAA's own guidance has shifted repeatedly. In early 2025, the association attempted to clarify that NIL deals should reflect "fair market value" rather than serve as recruiting inducements. This distinction is nearly impossible to enforce, and most state laws don't address it directly.
Most states allow college athletes to hire professional agents and representation for NIL deals without losing eligibility. However, the specifics differ. California, Florida, and Texas have explicit protections for athlete-agent relationships. Other states are less clear, creating situations where an athlete might need different representation depending on where their school is located versus where a brand deal originates.
For families, this means asking the right questions during recruitment: What agent relationships does the compliance office support? Does the state allow licensed agents for NIL specifically? Are there costs the school covers for NIL education and contract review?
The most contentious area of state NIL law is whether schools themselves can be involved in arranging or facilitating NIL deals. The majority of states prohibit direct institutional involvement — schools cannot broker deals on behalf of athletes or use NIL as a recruiting tool.
However, the line between "facilitating" and "educating" is blurry. Most schools operate NIL collectives — booster-funded organizations that create NIL opportunities for athletes. These collectives exist in a gray area that state laws address inconsistently.
Nebraska's approach of allowing direct institutional payment is an outlier that other states are watching closely. If the model proves successful and legally durable, expect more states to follow.
NIL income is taxable regardless of state, but state tax rates create real differences in what athletes take home. An athlete earning $100,000 in NIL deals in California faces state income tax of 9.3-12.3%, while the same athlete in Florida or Texas pays zero state income tax. This is a real factor in college selection — not just for the athletic program, but for the financial reality of NIL earnings.
Check our NIL Calculator to estimate take-home pay by state, and read our common NIL tax mistakes guide to avoid surprises at filing time.
Federal legislation remains stalled. Multiple bills have been introduced in Congress — the most recent being the NIL Rights Act — but partisan disagreements over athlete employment status, antitrust protections for the NCAA, and Title IX implications have prevented passage.
Meanwhile, the House v. NCAA settlement (currently being finalized) could reshape the entire framework by establishing a revenue-sharing model that makes some state NIL laws partially irrelevant. If institutions can directly compensate athletes through a formal revenue share, the role of state-by-state NIL regulation diminishes significantly.
For now, state law remains the primary regulatory framework. Families should treat state NIL rules as a key factor in college selection — on par with academic quality, athletic facilities, and coaching staff.
Quick answers about state NIL rules.
The state where the school is located generally governs NIL rules, not your home state. If your child lives in Ohio but attends school in Florida, Florida's NIL laws apply to their deals through the school.
Most state laws prohibit institutions from taking a cut of athlete NIL earnings. However, some states allow schools to charge for services like NIL education or contract review. Read the fine print.
NIL collectives operate in a legal gray area in most states. They're not explicitly prohibited by most state laws, but the NCAA has moved to restrict their role in recruiting. The legality depends heavily on how the collective operates and which state it's in.