North Carolina Lawmakers Clash With Athletic Association Over HS NIL Law

North Carolina appears poised to allow high school athletes to earn money from Name, Image and Likeness (NIL) deals. However, the state Senate is challenging the North Carolina High School Athletic Association over who should enforce NIL rules.

Last Wednesday, the North Carolina High School Athletic Association (NCHSAA), on a 15-3 vote by its Board of Directors, elected to allow for NIL agreements for student-athletes.

However, the North Carolina Senate amended the language of an existing bill (Senate Bill 636) to have the State Board of Education – not the NCHSAA – determine the parameters of such deals.

Senate votes along party lines over high school NIL restrictions

While this issue doesn’t jump out as an obvious political divide, all 30 Senate Republicans voted for the amendment to SB 636 to “demote” the NCHSAA, while all 20 Democrats voted against it. The philosophical split came down to how much power a state agency should be granted.

The Senate vote came just hours after the NCHSAA’s vote, which produced ire among several Republicans.

“This week, with this very bill moving, [the NCHSAA] saw fit to overstep their rights and power, and then they work behind our backs to undermine the General Assembly’s authority [in order to] to exploit our children – all in the name [of] a dollar,” Republican Sen. Vickie Sawyer told The Raleigh News & Observer.

The NCHSAA is in the first year of a four-year “memorandum of understanding” that generally authorizes the association oversight of public school athletics in North Carolina.

“The North Carolina High School Athletic Association has [seen] fit that they are now the ones who are going to be responsible for the name and licensing for our students,” Sawyer added. “How does a third-party administering organization have the right to tell my family who owns my child’s likeness? That is not what this organization is here for.”

Profiting from NIL deals in North Carolina is scheduled to launch for state high school athletes on July 1, regardless of who is in charge.

NIL course mandatory first step for NC high school athletes and stakeholders

As is already the case in many other states, North Carolina athletes must go through a NIL training course developed by the National Federation of State High School Associations. Athletic directors, coaches, principals and parents also must take the NFSHSA course.

After that, athletes can make money from appearances, brand sponsorships, appearances at clinics or camps, autograph sales, involvement with non-fungible tokens (NFTs) and their social media followings.

Student-athletes cannot promote gambling, among other restrictions

While given a wide range of possible sources of income, North Carolina officials also are setting plenty of limits.

High school athletes cannot cut NIL deals regarding gambling, firearms, adult entertainment, alcohol, prescription drugs, tobacco or vaping. Student-athletes also must notify their schools of any NIL agreements they sign, and the schools must inform the NCHSAA about them.

As well as placing limitations on products, the NCHSAA disallows students from promoting their schools, conferences and the North Carolina high school sports TV network. Any activities disrupting the school day are impermissible.

Collegiate NIL laws take state-by-state approach to prohibited endorsements

In July 2021, the US Supreme Court’s decision in NCAA v. Alston allowed the NCAA to change its rules about amateurism in response to years of complaints about coaches making money from endorsements while high school and college athletes went unpaid (at least, legally unpaid).

The NIL oversight debate is part of a larger overall change in attitudes about North Carolina sports betting and NIL deals.

While three tribal casinos in North Carolina already have the authority to offer sports betting at their venues thanks to recent changes in the gambling laws, mobile sports betting legislation has favorable odds of passage this legislative session. If it does, online sports betting in North Carolina could launch on Jan. 8, 2024 – dramatically increasing the amount of wagers and the amount of wagering taxes collected in the state.

In many states, 90% or more of all bets are placed online rather than at retail sites such as casinos or sportsbooks.

Several states, including early adapters New Jersey and Pennsylvania, specifically bar college athletes in their states from partnering with gaming companies.

But in 2021 in Colorado, now-defunct MaximBet announced it would offer NIL deals to every female college athlete in the state age 21 and older – offering a minimum of $500 plus free merchandise for a four-month commitment. The athletes were required to follow the MaximBet brand on various social media sites, but they didn’t have to encourage their followers to sign up for an account with MaximBet.

As Colorado indicates, the decision about what an athlete can endorse falls to individual states.

North Carolina’s collegiate NIL policy gives universities wide latitude to restrict NIL deals, but it does not explicitly prohibit any type of product, including gambling. The specific language of the collegiate policy identifies products or brands that are “antithetical” to an institution’s values or may “negatively impact” the institution.

NIL-amended SB 636 off to House

With passage in the Senate, Republican-driven SB 636 heads to the North Carolina House, where the Republican-led lower chamber will decide to pass and send it along to the governor, amend and return to the Senate or revoke altogether. Gov. Roy Cooper, a Democrat, could veto the measure if advanced, but even if he does, having also been approved in the state House of Representatives, another 30-20 vote in the state Senate to end the veto would override Cooper’s decision.

About the Author

John Brennan

John Brennan has covered the issue of the expansion of legal sports betting since New Jersey voters approved a ballot question backing the idea in 2011. He covered the lawsuit by the NFL and four other sports organizations against the state from 2012-018, when the U.S. Supreme Court struck down a 26-year-old federal law that effectively had given Nevada a monopoly on sports betting. Since then, Brennan has tracked betting legalization efforts in every state, including North Carolina.