
NIL
Top U.S. Legal Issues For Companies Investing In Esports And Gaming Technology

The esports and gaming technology industry is experiencing rapid
growth, with global revenue expected to surpass $3 billion by 2025.
As companies rush to invest in this lucrative sector, they must
navigate a complex legal landscape that includes intellectual
property protection, contract law, regulatory compliance, and more.
Below are the most critical legal issues facing businesses
investing in esports and gaming technology in the U.S.
1. Intellectual Property (IP) Protection
Copyright and Trademarks
Video games and esports involve multiple layers of intellectual
property, including game content, character designs, logos, and
branding elements. Companies investing in the industry must ensure
they own or properly license these assets.
- Game developers and publishers: Must protect
their original game content through copyright laws. - Esports teams and organizations: Need to
secure trademarks for their team names, logos, and other branding
elements. - Streaming platforms and content creators: Must
ensure that they have proper rights to broadcast gameplay and use
in-game assets.
Licensing Agreements
Many companies invest in gaming technology through partnerships
with developers or esports teams. Licensing agreements define how
intellectual property can be used and prevent costly disputes.
Companies should establish clear licensing arrangements to avoid
infringement claims.
Case Example: Riot Games vs. Moonton
Riot Games, the developer of League of Legends, sued Moonton for
copyright infringement over its mobile game Mobile Legends,
claiming it copied substantial elements from League of Legends. The
case highlights the importance of protecting game assets from
unauthorized use and ensuring licensing agreements are properly
structured. Both parties reached a global settlement in April 2024,
with Riot Games formally withdrawing all lawsuits.
2. Contract and Employment Law
Player and Team Contracts
Esports teams sign players, coaches, and managers to contracts
that outline salary, sponsorship obligations, and behavioral
expectations. These agreements must comply with U.S. employment and
labor laws to avoid disputes over unfair terms or unlawful
termination.
- Non-compete clauses: Courts may scrutinize
restrictions on where players can compete after leaving a
team. - Sponsorship agreements: Terms must be clear on
exclusivity, duration, and compensation. - Player unionization: Discussions around
collective bargaining for esports players are growing, raising
questions about employment classification.
Case Example: Tfue vs. FaZe Clan
Professional gamer Turner “Tfue” Tenney sued FaZe
Clan, claiming his contract was “oppressive” and violated
California labor laws by restricting his ability to earn
sponsorship deals outside the organization. The lawsuit shed light
on the importance of fair employment agreements in the esports
industry. The case was settled in August 2020.
Endorsement and Sponsorship Deals
Esports athletes, streamers, and influencers frequently enter
into sponsorship agreements with brands. These deals must comply
with Federal Trade Commission (FTC) guidelines, including clear
disclosures of sponsored content to avoid deceptive marketing
practices.
Case Example: FTC vs. CSGOLotto
The FTC cracked down on CSGOLotto, an esports gambling website,
for failing to disclose that influencers promoting the site were
actually its owners. This case underscores the importance of proper
sponsorship disclosures and compliance with advertising laws.
3. Regulatory Compliance and Gambling Laws
Gambling and Betting Regulations
Many esports tournaments involve prize pools, and some allow
betting on matches. Companies investing in esports gambling
platforms must comply with state and federal laws governing online
betting.
- Unlawful Internet Gambling Enforcement Act
(UIGEA): Restricts online gambling practices in the
U.S. - Loot boxes: Regulators are debating whether
randomized in-game purchases constitute gambling, which could lead
to future restrictions. - Fantasy esports leagues: Must navigate legal
challenges similar to those faced by traditional fantasy sports
platforms.
Case Example: Electronic Arts (EA) and Loot
Boxes
Electronic Arts has faced multiple lawsuits over loot boxes in
FIFA Ultimate Team, with claims that these in-game purchases
constitute illegal gambling. Some U.S. states are considering
regulations that would restrict or ban loot boxes.
Consumer Protection and Data Privacy
Gaming companies collect vast amounts of player data, requiring
strict adherence to privacy laws, including:
- Children’s Online Privacy Protection Act
(COPPA): Protects data collected from users under 13. - California Consumer Privacy Act (CCPA):
Provides California residents with data access and deletion
rights. - General Data Protection Regulation (GDPR)
compliance: While a European regulation, U.S. companies
with international users must often comply.
Case Example: TikTok’s COPPA Violation
Although not specific to gaming, TikTok was fined by the FTC for
violating COPPA by collecting data from children under 13 without
parental consent. This serves as a warning to gaming companies that
collect data from minors.
4. Antitrust and Competition Law
As the gaming industry consolidates, major acquisitions, such as
Microsoft’s purchase of Activision Blizzard, have raised
antitrust concerns. The Federal Trade Commission (FTC) and
Department of Justice (DOJ) closely monitor large transactions that
could stifle competition.
Companies should evaluate:
- Market dominance concerns: Avoiding
monopolistic behaviors that could trigger legal scrutiny. - Exclusive agreements: Ensuring that
partnerships and exclusivity deals comply with competition
laws. - Mergers and acquisitions: Obtaining regulatory
approval for significant industry consolidations.
Case Example: FTC vs. Microsoft-Activision
Merger
The FTC challenged Microsoft’s acquisition of Activision
Blizzard over concerns that it would reduce competition in the
gaming industry. The case exemplifies the legal complexities
surrounding major gaming mergers and acquisitions. The merger was
ultimately approved and completed in October 2023, with the
FTC’s appeals being rejected as recently as May 2025.
5. Cybersecurity and Online Safety
Gaming platforms and esports organizations face increasingly
sophisticated cyber threats, requiring robust security measures and
compliance with evolving regulatory frameworks. The intersection of
cybersecurity law, data protection, and gaming presents complex
challenges that have intensified significantly in 2024-2025.
The gaming industry faced significant cybersecurity challenges
in 2024, including major breaches at Ubisoft where cybercriminals
accessed sensitive internal systems and leaked employee credentials
and game files. Microsoft’s Xbox Live network experienced
multiple DDoS attacks causing service outages for millions of
users, highlighting vulnerabilities in online gaming
infrastructure.
Cyberattacks cost gaming companies millions of dollars annually
through immediate recovery costs, long-term financial consequences,
lost revenue, legal fees, and significant reputation damage that
leads to consumer trust erosion.
- Federal and state data breach notification
laws: Companies must inform users of data breaches in a
timely manner. All 50 U.S. states plus Washington D.C. and three
federal territories have data breach notification laws, and the SEC
requires public companies to report material cybersecurity
incidents in Form 8-K within four business days. New SEC rules
effective August 2024 require registered investment advisers,
transfer agents, and broker-dealers to notify customers within 30
days if their information may have been stolen. - State-specific gaming cybersecurity laws:
Nevada and Massachusetts recently passed laws with specific data
security requirements for gaming operators and licensees,
reflecting targeted regulatory attention to the gaming sector’s
unique risks. - Online harassment and moderation policies: The
FTC’s updated COPPA rule, finalized in January 2025,
significantly strengthens cybersecurity requirements for platforms
serving children, including mandatory opt-in consent for targeted
advertising, strict data retention limits, and enhanced
transparency requirements for Safe Harbor programs. - Consumer Financial Protection Bureau (CFPB):
The CFPB has issued guidance stating that insufficient data
protection or information security violates the Consumer Financial
Protection Act’s prohibition on unfair acts or practices.
Gaming companies must avoid practices like failing to patch known
vulnerabilities or lacking procedures to prevent unauthorized
account access. - Mandatory security measures: Various federal
and state cybersecurity laws require organizations to take specific
security measures including implementation of reasonable security
procedures, data encryption requirements, and written security
program. - Critical infrastructure: The federal
government has issued sector-specific guidance for critical
infrastructure operators, with detailed statutory and regulatory
requirements for various sectors that may apply to large gaming
platforms.
In terms of regulatory trends, state regulators in New York,
Texas, and California are expected to intensify privacy and
cybersecurity enforcement in 2025, leveraging newly enacted state
laws and existing UDAP statutes with greater punitive focus than
federal enforcement. Additionally, AI is increasingly being used in
gaming for safer gambling through behavior tracking, enhanced
security measures, and compliance monitoring, while also raising
new regulatory considerations.
Case Example: Twitch Hate Raids
Twitch has faced lawsuits over inadequate moderation, as
streamers have been targeted by “hate raids,” where
malicious actors flood their streams with hateful content. The case
highlights the need for strong online safety policies in esports
and gaming.
6. Other Recent Developments
The gaming and esports industry has experienced significant
regulatory changes in 2024-2025, with increased government
attention to consumer protection, children’s safety, and fair
business practices. These developments reflect the industry’s
growing mainstream recognition and corresponding regulatory
scrutiny.
Major FTC Enforcement Actions
Genshin Impact Loot Box Settlement: In January
2025, the FTC secured a landmark $20 million settlement with
HoYoverse (Cognosphere) over Genshin Impact, marking a significant
expansion of regulatory oversight into loot box mechanics. The
settlement included several groundbreaking elements:
- Novel Legal Theory: The FTC argued that
selling loot boxes to children and teenagers without verifiable
parental consent constitutes an “unfair and deceptive trade
practice” under Section 5 of the FTC Act. - Age Restrictions: Companies must block
children under 16 from making in-game purchases without parental
consent. - COPPA Expansion: The FTC broadly interpreted
Genshin Impact as “child-directed” despite its “T
for Teen” ESRB rating, based on content analysis and
advertising practices targeting children.
Implications for Industry This settlement
creates precedent for state attorneys general and private class
action litigants to file lawsuits under state unfair business
practices statutes, significantly increasing litigation risk for
games with loot box mechanics appealing to minors.
Updated COPPA Rule (2025)
The FTC finalized significant updates to the Children’s
Online Privacy Protection Rule in January 2025, the first major
revision since 2013. Key changes include:
Enhanced Consent Requirements
- Mandatory opt-in parental consent for targeted advertising and
third-party data disclosures - Separate consent requirements for different data uses beyond
basic service provision
Data Minimization and Retention
- Companies can only retain children’s personal information
as long as reasonably necessary for specific purposes - Explicit prohibition on indefinite data retention
Increased Transparency
- COPPA Safe Harbor programs must publicly disclose membership
lists - Enhanced reporting requirements to the FTC for self-regulatory
programs
FTC Workshop on Child Exploitation
The FTC has scheduled a major workshop for June 4, 2025, titled
“The Attention Economy: How Big Tech Firms Exploit Children
and Hurt Families,” indicating continued regulatory focus on
gaming platforms’ impact on minors.
7. Immigration and Visa Issues
Esports relies heavily on international talent, and securing
proper visas for players and staff remains a critical and evolving
challenge. The U.S. offers several visa pathways for esports
professionals, but navigating the immigration system requires
careful planning and legal expertise.
- P-1A visa classification: Since 2013, when
USCIS first recognized an esports player as an athlete and granted
Danny “Shiphtur” Le a P-1A visa for League of Legends
competition, this classification has become the primary pathway for
internationally recognized esports athletes. The P-1A visa requires
evidence of international recognition at a high level of
achievement; participation in competitions with distinguished
reputations; and substantial skill recognition in more than one
country. P-1A visas are valid for up to 5 years for individuals,
with extensions possible up to a total of 10 years. Essential
support personnel including coaches, trainers, team officials, and
referees are also eligible for P-1 classification. - O-1 visa for extraordinary ability: The O-1A
visa serves as an alternative for esports professionals with
significant achievements, valid for up to three years and
extendable in one-year increments. This classification doesn’t
distinguish between individual and team events and may be more
suitable for content creators and streamers with extraordinary
abilities. - B-1/B-2 visitor visas: Esports athletes
training or competing without receiving payments may qualify for
B-1/B-2 visitor visas, particularly those from visa waiver program
countries. This option is suitable for short-term training, unpaid
tournaments, and amateur competitions. - Challenges in visa processing: The P-1 success
rate varies significantly by game, with some esports athletes
facing denials due to inconsistent interpretations of what
constitutes a “legitimate sport.” Recent cases, including
Moist Esports’ legal battle with U.S. immigration over B-1 visa
denials, highlight ongoing procedural challenges and potential
misinterpretation of eligibility criteria. - 2025 Olympic Esports: The introduction of
Olympic Esports Games in 2025 is expected to create new
opportunities for esports athletes, potentially strengthening their
cases for P-1A and O-1A visas through increased international
recognition and legitimacy. - Permanent Residency Options: Qualified esports
athletes may pursue EB-1A “green cards” for permanent
residency if they can fulfill extraordinary ability requirements,
providing long-term stability for top performers. - Best Practices for Companies:Companies should
begin visa applications 3-6 months before needed travel
dates. They should also gather extensive evidence
of international recognition, tournament results, and media
coverage. Companies may consider developing backup plans using
different visa classifications. Companies may also find it prudent
to consider visa needs for coaches, analysts, and other essential
personnel (e.g., P-1S classification).Finally, companies should
monitor ongoing developments in esports recognition and potential
legislative changes that could streamline the immigration process
for gaming professionals.
Case Example: Visa Denials for The
International
Several Dota 2 players were denied visas to compete in The
International, a major esports tournament, due to confusion over
esports classifications. This case demonstrates the ongoing
challenges in securing visas for competitive gaming
professionals.
8. Compliance Recommendations
Immediate Actions for Gaming Companies
- Review and update COPPA compliance programs in light of 2025
rule changes - Assess loot box mechanics for potential unfair practice
exposure - Implement enhanced parental consent mechanisms for users under
16 - Develop transparent odds disclosure and pricing
information - Monitor state-specific gaming tax and regulatory changes
Strategic Considerations
- Consider federal lobbying efforts as sports betting regulation
discussion continues - Prepare for increased state-level enforcement activity
- Evaluate international expansion opportunities in evolving
regulatory environments - Invest in AI-powered compliance and monitoring systems
- Develop comprehensive children’s safety programs beyond
minimum legal requirements
These regulatory developments reflect the gaming industry’s
transition from niche entertainment to mainstream regulated sector,
requiring companies to invest significantly in legal compliance and
consumer protection measures.
Conclusion
Investing in esports and gaming technology offers tremendous
opportunities, but companies must navigate a complex legal
environment to mitigate risks. From intellectual property
protection and player contracts to gambling regulations and
cybersecurity concerns, staying compliant with U.S. laws is
essential for success. As the industry evolves, investors and
businesses must remain vigilant and proactive in addressing these
legal challenges to sustain long-term growth.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
NIL
NCAA makes eligibility ruling on Ole Miss QB Trinidad Chambliss
In November, Ole Miss quarterback Trinidad Chambliss filed a waiver petition to receive a sixth year of eligibility. He transferred to Ole Miss ahead of the 2025 season after spending four years at Division II program Ferris State.
Following the Rebels’ stellar 13-2 season and appearance in the College Football Playoff Semifinals, the ruling on Chambliss’ eligibility has finally been handed down from the NCAA.
The Grand Rapids native’s waiver has officially been denied, dealing a massive blow to Pete Golding and the Ole Miss Rebels. Chambliss will now head to the NFL Draft, where he sits at No. 4 on Mel Kiper Jr.’s quarterback rankings. He is slotted behind Oregon‘s Dante Moore, Indiana‘s Fernando Mendoza, and Alabama‘s Ty Simpson.
Chambliss opened the season as Austin Simmons‘ backup, but assumed starting duties once Simmons suffered an injury in the Rebels’ 30-23 victory over Kentucky on Sept. 6. Not only did Chambliss serviceably fill in for Simmons, but he evolved into one of the best quarterbacks in the sport. He passed for 3,937 yards and 22 touchdowns with just three interceptions this season, along with rushing for 527 yards and eight more scores.
Ole Miss‘ starting quarterback passed for at least 300 yards in eight games and finished eighth in Heisman Trophy voting. He cemented himself as a program legend thanks to his performance in the Rebels’ 39-34 win over No. 3 Georgia in the Sugar Bowl, where he pulled off multiple spectacular plays to clinch the historic victory.
NCAA’s Full Statement on Trinidad Chambliss:
“In November, Ole Miss filed a waiver request for football student-athlete Trinidad Chambliss, seeking to extend his five-year Division I eligibility clock, citing an incapacitating illness or injury. Approval requires schools to submit medical documentation provided by a treating physician at the time of a student’s incapacitating injury or illness, which was not provided. The documents provided by Ole Miss and the student’s prior school include a physician’s note from a December 2022 visit, which stated the student-athlete was “doing very well” since he was seen in August 2022.”
“Additionally, the student-athlete’s prior school indicated it had no documentation on medical treatment, injury reports or medical conditions involving the student-athlete during that time frame and cited “developmental needs and our team’s competitive circumstances” as its reason the student-athlete did not play in the 2022-23 season. The waiver request was denied. This decision aligns with consistent application of NCAA rules. So far this academic year, the NCAA has received 784 clock extension requests (438 in football). Of those, 25 cases cited an incapacitating injury (nine in football). The NCAA approved 15 of those (six in football), and all 15 provided medical documentation from the time of the injury. Conversely, all 10 that were denied (three in football) did not provide the required medical documentation.”
“To receive a clock extension, a student-athlete must have been denied two seasons of competition for reasons beyond the student’s or school’s control, and a “redshirt” year can be used only once. One of the rules being cited publicly (Bylaw 12.6.4.2.2) is not the correct rule for the type of waiver requested by the school. Ole Miss applied for the waiver in November, and the NCAA first provided a verbal denial Dec. 8.”
Chambliss will now head off to the NFL, while Pete Golding and Ole Miss scramble to find a replacement at the position. Austin Simmons, who Chambliss replaced, announced his transfer to Missouri on Jan. 6.
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As college becomes game of musical chairs, BYU bucking the trend – Deseret News
While chaos has blanketed college football in the state and more than 30% of college players are in the transfer portal, BYU coach Kalani Sitake’s regime has, well, kind of escaped.
As of Friday afternoon, not one starter from the 2025 team has left for the transfer portal.
Sitake lost his defensive coordinator, Jay Hill, who took his cornerback coach, Jernaro Gilford, with him. But nobody followed them. Not one player.
Knock on wood.
That’s the roster heading into this weekend.
Why?
Well, one could preach culture or momentum, all that stuff. But it boils down to one single huge factor that clearly stands out since the Cougars defeated Georgia Tech in the Pop-Tarts Bowl in Orlando.
BYU has become a player-driven team.
Like 100%.
And that is a huge factor heading into winter workouts, spring practice, acceptance of returning players from church missions, and a sprinkling of transfer portal players expected to be announced in the coming days.
Hill’s replacement, Kelly Poppinga, told a BYUtv audience Friday that the retention effort began the day after the bowl game. He described coaches taking to the phones for 12 hours a day to re-recruit their stars.
But that was matched or even surpassed by player-driven emotions wanting to keep it rolling, to come back.
Now, nobody’s naive enough to think this wasn’t done without BYU’s collectives and revenue-sharing program having a lot to do with shoring up NIL contracts.
That’s reality today.
But it was done, starting with some of the most prized players, like honorable mention All-America safety Faletau Satuala, whom many believed would be targeted by Hill and Michigan.
But, somewhat surprisingly, Satuala announced his return quickly. So did tackle Keanu Tanuvasa, Isaiah Glasker, Siale Esera and other defenders.
The offense followed, capped by Big 12 offensive player of the year running back LJ Martin.
Poppinga said he expects the late news on corner Evan Johnson, BYU’s best cover athlete, is soon to come out in BYU’s favor.
That is quite remarkable.
On Friday, USC tight end Walker Lyons, older brother of QB commit Ryder Lyons, announced he was transferring to BYU to compete for departing Ryan Carsen’s job.
On the day Hill announced he would follow his friend Kyle Whittingham to Michigan, it became a full three days of working the phones, said Poppinga.
“Ultimately, I just think the players love Kalani. And a lot of those guys, all of them, came to play for him. Hill would say the same thing. Jay is a humble guy, and he sees things, he knows that no one person or player is bigger than them.”
Poppinga said BYU players ran this team with a feeling of retention and continuity.
“Obviously, us coaches, you’ve got to put them in the right positions and make sure that we’re making the right adjustments and doing the right things. But when you have great players and great leadership, I think everything else takes care of itself.”
Corner Tre Alexander began his own campaign to maintain the roster on TV right after Jay Hill announced he was going to Michigan. He then texted Poppinga, saying, “Coach, just so you know. I ain’t going anywhere.”
“And he’s like, ‘And I’m going to call everybody right now. I’m going to help you out to keep everybody here.’
“He’s the best,” said Poppinga.
“He’s like, ‘Coach, I’m rallying the troops.’
“And then a couple of hours later, he’s like, ‘Coach, nobody’s leaving.’”
Poppinga: “There are so many pieces to this thing. And it’s just not one player, one coach. I think it’s just the collective unit that we have. It’s been special. And it all starts with Kalani and his leadership and just this culture he has here.”
Sitake, said Poppinga, was the biggest portal guy when Penn State came calling.
“He went in the portal and stayed.”

NIL
NCAA Denies Ole Miss QB Trinidad Chambliss a 6th Year of Eligibility
Ole Miss quarterback Trinidad Chambliss saw his season end on Thursday night, and on Friday, potentially his college career. The NCAA formally rejected a request for a sixth year of eligibility, with which he would have been able to return to the Rebels as their starting QB once more.
Instead, Chambliss has two options in front of him. Ole Miss can still appeal the NCAA’s ruling in an attempt to retain Chambliss and have him play out the deal he had agreed to for 2026 that was pending NCAA granting additional eligibility, or Chambliss can enter the NFL Draft to continue his football career in the pros, instead. Given the NCAA’s reasoning for their refusal to grant the additional year of eligibility, an appeal doesn’t guarantee any kind of success.
Ole Miss athletic director Keith Carter said his school will appeal the ruling.
“We are disappointed with today’s announcement by the NCAA and plan to appeal the decision to the Committee level,” Carter said in a social media post, in which he included the flag of Trinidad and Tobago. “Additionally, we will continue to work in conjunction with Trinidad’s representatives in other avenues of support.”
Tom Mars, who is an attorney for Chambliss, said he was disappointed but not surprised by the NCAA’s decision. “The last time I checked, however, the only score that matters is the one at the end of the fourth quarter,” Mars said.
“I understand that Ole Miss will file an appeal with the NCAA. However, there’s now an opportunity to move this case to a level playing field where Trinidad’s rights will be determined by the Mississippi judiciary instead of some bureaucrats in Indianapolis who couldn’t care less about the law or doing the right thing,” Mars said. “Whether to pursue that course of action is a decision only Trinidad and his parents can make.”
[Beck? Kiffin? 4 Takeaways From Miami’s CFP Semifinal Win Over Ole Miss]
In its own statement, the NCAA explained the reason for the rejection by giving background to how the process works in general, how it worked for Chambliss and what was lacking for the decision to go in his and Ole Miss’ favor.
“In November, Ole Miss filed a waiver request for football student-athlete Trinidad Chambliss, seeking to extend his five-year Division I eligibility clock, citing an incapacitating illness or injury. Approval requires schools to submit medical documentation provided by a treating physician at the time of a student’s incapacitating injury or illness, which was not provided. The documents provided by Ole Miss and the student’s prior school include a physician’s note from a December 2022 visit, which stated the student-athlete was “doing very well” since he was seen in August 2022. Additionally, the student-athlete’s prior school indicated it had no documentation on medical treatment, injury reports or medical conditions involving the student-athlete during that time frame and cited “developmental needs and our team’s competitive circumstances” as its reason the student-athlete did not play in the 2022-23 season. The waiver request was denied.”
The “prior school” mentioned by the NCAA is Division II Ferris State, at which Chambliss was a redshirt freshman in 2021 before moving into a backup role and then becoming a national champion as its starter in 2024.
The NCAA elaborated that, “To receive a clock extension, a student-athlete must have been denied two seasons of competition for reasons beyond the student’s or school’s control, and a “redshirt” year can be used only once. One of the rules being cited publicly (Bylaw 12.6.4.2.2) is not the correct rule for the type of waiver requested by the school. Ole Miss applied for the waiver in November, and the NCAA first provided a verbal denial Dec. 8.”
Chambliss led the SEC in passing yards in 2025 with 3,937 while throwing 22 touchdowns against just 3 interceptions. He finished eighth in the Heisman voting overall and fifth among quarterbacks, behind Georgia’s Gunner Stockton, Ohio State’s Julian Sayin, Vanderbilt’s Diego Pavia and the winner of the 2025 Heisman, Indiana’s Fernando Mendoza. Chambliss led Ole Miss to the College Football Player for the first time, and the Rebels’ 13 wins are a school record.
The Associated Press contributed to this report.
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NIL
College enforcement group voices ‘serious concerns’ with spiraling transfer portal – Las Vegas Sun News
Published Friday, Jan. 9, 2026 | 4:39 p.m.
Updated Friday, Jan. 9, 2026 | 4:39 p.m.
A
transfer portal
spiraling out of control prompted the new regulatory body for college sports to issue a memo to athletic directors Friday night saying it has “serious concerns” about some of the multimillion-dollar contracts being offered to players.
The “reminder” from the College Sports Commission came out about an hour before kickoff of the semifinal between
Indiana and Oregon in a College Football Playoff
that has shared headlines with news of players signing seven-figure deals to move or, in some cases, stay where they are.
The CSC reminded the ADs that, according to the rules, third-party deals to use players’ name, image and likeness “are evaluated at the time of entry in NIL Go, not before, and each deal is evaluated on its own merits.”
“Without prejudging any particular deal, the CSC has serious concerns about some of the deal terms being contemplated and the consequences of those deals for the parties involved,” the memo said.
Under terms of the House settlement that dictated the rules for NIL payments, schools can share revenue with their players directly from a pool of $20.5 million. Third-party deals, often arranged by businesses created to back the schools, are being used as workarounds this so-called salary cap.
The CSC, through its NIL Go portal, is supposed to evaluate those deals to make sure they are for a valid business purpose and fall within a fair range of compensation for the services being provided.
The CSC did not list examples of unapproved contracts, but college football has seen its share of seven-figure deals luring players to new schools since the transfer portal opened on Jan. 2.
One high-profile case involved
Washington quarterback Demond Williams Jr.,
who initially sought to enter the transfer portal and turn his back on a reported deal worth $4 million with the Huskies. Legal threats ensued and Williams changed course and stayed at Washington.
“Making promises of third-party NIL money now and figuring out how to honor those promises later leaves student-athletes vulnerable to deals not being cleared, promises not being able to be kept, and eligibility being placed at risk,” the CSC letter said.
The commission listed two rules about contracts it evaluates, some of which have been termed “agency agreement” or “services agreement” in what look like attempts to bypass the rules.
—”The label on the contract does not change the analysis; if an entity is agreeing to pay a student-athlete for their NIL, the agreement must be reported to NIL Go within the reporting deadline.”
—”An NIL agreement or payment with an associated entity or individual … must include direct activation of the student-athlete’s NIL rights.” This is a reference to the practice of “warehousing” NIL rights by paying first, then deciding how to use them later.
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NIL
College enforcement group voices ‘serious concerns’ with spiraling transfer portal

News – AP-National
A transfer portal spiraling out of control prompted the new regulatory body for college sports to issue a memo to athletic directors saying it has “serious concerns” about some of the multimillion-dollar contracts being offered to players.
By EDDIE PELLSAP National Writer
A transfer portal spiraling out of control prompted the new regulatory body for college sports to issue a memo to athletic directors Friday night saying it has “serious concerns” about some of the multimillion-dollar contracts being offered to players.
The “reminder” from the College Sports Commission came out about an hour before kickoff of the semifinal between Indiana and Oregon in a College Football Playoff that has shared headlines with news of players signing seven-figure deals to move or, in some cases, stay where they are.
The CSC reminded the ADs that, according to the rules, third-party deals to use players’ name, image and likeness “are evaluated at the time of entry in NIL Go, not before, and each deal is evaluated on its own merits.”
“Without prejudging any particular deal, the CSC has serious concerns about some of the deal terms being contemplated and the consequences of those deals for the parties involved,” the memo said.
Under terms of the House settlement that dictated the rules for NIL payments, schools can share revenue with their players directly from a pool of $20.5 million. Third-party deals, often arranged by businesses created to back the schools, are being used as workarounds this so-called salary cap.
The CSC, through its NIL Go portal, is supposed to evaluate those deals to make sure they are for a valid business purpose and fall within a fair range of compensation for the services being provided.
The CSC did not list examples of unapproved contracts, but college football has seen its share of seven-figure deals luring players to new schools since the transfer portal opened on Jan. 2.
One high-profile case involved Washington quarterback Demond Williams Jr., who initially sought to enter the transfer portal and turn his back on a reported deal worth $4 million with the Huskies. Legal threats ensued and Williams changed course and stayed at Washington.
“Making promises of third-party NIL money now and figuring out how to honor those promises later leaves student-athletes vulnerable to deals not being cleared, promises not being able to be kept, and eligibility being placed at risk,” the CSC letter said.
The commission listed two rules about contracts it evaluates, some of which have been termed “agency agreement” or “services agreement” in what look like attempts to bypass the rules.
—”The label on the contract does not change the analysis; if an entity is agreeing to pay a student-athlete for their NIL, the agreement must be reported to NIL Go within the reporting deadline.”
—”An NIL agreement or payment with an associated entity or individual … must include direct activation of the student-athlete’s NIL rights.” This is a reference to the practice of “warehousing” NIL rights by paying first, then deciding how to use them later.
Copyright 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
NIL
QB Brendan Sorsby’s transfer to Texas Tech triggers $1M Cincinnati buyout: Sources
Brendan Sorsby, ranked No. 1 in The Athletic’s transfer quarterback rankings, transferred to Texas Tech earlier this week with one season remaining on a multi-year revenue sharing agreement with Cincinnati that includes a $1 million buyout clause, multiple people briefed on the deal told The Athletic. They were granted anonymity because they were not authorized to speak publicly about the terms of the deal.
The buyout payment is due to Cincinnati within 30 days of Sorsby’s transfer. It is not immediately clear how Sorsby’s buyout will be resolved.
Texas Tech was aware of Sorsby’s buyout, according to sources briefed on the transfer process, and factored it into his recruitment, as well as Tech’s own revenue sharing budget.
Ron Slavin, Sorsby’s agent with Lift Sports Management, declined comment.
Spokespersons for both Texas Tech and Cincinnati declined comment.
There have been questions about how revenue sharing contract terms might hold up under legal scrutiny, in part because college athletes are not employees and their rev share contracts are not typical employment agreements.
The full details of Sorsby’s agreement with the Red Raiders are not public, but the one-year deal is expected to pay him more than $4 million, according to people briefed on the terms. His signing was officially announced Tuesday by Texas Tech.
A redshirt junior with one year of eligibility remaining, Sorsby elected to enter the transfer portal and ultimately sign with Texas Tech rather than declare for the 2026 NFL Draft, where he is projected as a potential Day 2 pick.
Brendan Sorsby is officially a Red Raider.#WreckEm pic.twitter.com/EGE4Xn1OIL
— Texas Tech Football (@TexasTechFB) January 6, 2026
Sorsby’s buyout is indicative of the new era of direct revenue sharing between schools and athletes under the House v. NCAA settlement, which was instituted last summer. Many schools have included buyout clauses in their rev share agreements that obligate athletes to redeem money to their previous school if they leave before the end of the agreement.
According to enforcement guidelines from the College Sports Commission, the organization that oversees revenue sharing, Sorsby’s $1 million buyout must be accounted for by Texas Tech within the school’s $20.5 million revenue sharing cap for fiscal year 2025-26. Texas Tech is not required to directly pay Cincinnati to cover the buyout costs.
Multiple power conference general managers told The Athletic they have either signed players who had buyouts with their previous schools or lost players with buyouts to other teams. The player or their representative will often handle paying the buyout to the previous institution, whether in full or at a negotiated rate.
“(Player buyouts are) happening this year. It’s not prevalent, but it’s happening,” said Darren Heitner, who specializes in sports law. “Typically there is a negotiation where a school starts at a specific number and then negotiates down, if the player has good counsel.”
Sorsby initially transferred from Indiana to Cincinnati as a redshirt sophomore, ahead of the 2024 season, signing an NIL agreement before revenue sharing began in July 2025. Last offseason, Sorsby signed a new two-year deal with Cincinnati’s NIL collective, a third-party group affiliated with the school, that later transitioned to a rev share contract with the university. The $1 million buyout was agreed to in both the multi-year collective deal and revenue sharing agreements. Sorsby earned roughly $1.5 million in 2025 from Cincinnati, according to people briefed on the previous terms.
There have been relatively few public disputes of NIL or rev share contracts between players, schools or third parties since college athletes could begin earning NIL compensation in 2021.
Earlier this week, Washington quarterback Demond Williams Jr. announced intentions to enter the transfer portal just days after signing a new contract with the Huskies that’s expected to pay him more than $4 million. The buyout would have likely factored into any protracted legal battle between player and school, but Williams never actually entered the portal and announced on Thursday that he will remain with Washington.
Late last year, the University of Georgia took former defensive end Damon Wilson II to court, with Georgia seeking arbitration and $390,000 in damages after the university claimed Wilson broke an agreement with Georgia’s NIL collective by entering the transfer portal in January 2025, prior to the onset of revenue sharing. Wilson, who transferred to Missouri for the 2025 season, later sued Georgia’s athletic association seeking his own damages for what the suit described as a “civil conspiracy” to interfere with Wilson’s business endeavors. It’s believed to be the first time a player and school have taken each other to court over an NIL dispute. Both proceedings are still ongoing. Wilson recently re-entered the portal.
Last summer, the University of Wisconsin and its NIL collective filed a lawsuit against the University of Miami for tampering with defensive back Xavier Lucas, who Wisconsin claimed had an agreement with their NIL collective and another “binding agreement” with the university that was contingent on revenue sharing being approved. The next hearing in this case is scheduled for March 2026.
In April 2025, a contract holdout by former Tennessee quarterback Nico Iamaleava ended with Iamaleava transferring to UCLA, but no legal action was taken.
Former Florida signee Jaden Rashada has a pending lawsuit filed against various parties, including former Gators coach Billy Napier, that stems from a 2022 NIL deal.
One Power 4 coach who spoke on the condition of anonymity, said that in some instances, unfulfilled buyout terms or the player attached might not be worth the time and effort to spark a legal battle, and some universities might be hesitant to pursue litigation against a college athlete.
“It’s less of a legal challenge and more of an optics challenge for institutions at this point,” said lawyer Paia LaPalombara, a former college athletics administrator who advises colleges, conferences and athletes on revenue sharing.
A 6-foot-3, 235-pound dual-threat quarterback, Sorsby averaged better than 2,800 yards passing and 500 rushing yards in his two seasons with the Bearcats, including 36 combined touchdowns passing and rushing in 2025, third-most in the FBS, with only five interceptions. He led Cincinnati to a 7-5 regular season record in 2025 and a spot in the Liberty Bowl, the program’s first bowl bid since 2022.
Sorsby opted out of the bowl game, announcing on Dec. 15 that he planned to enter the transfer portal. The native of Denton, Texas, was quickly linked to Texas Tech as a potential destination. He made recruiting visits to Tech and LSU.
The Red Raiders recently completed a 12-2 season in 2025, winning the Big 12 championship and earning a first-round bye in the College Football Playoff, where they lost to Oregon 23-0 in the quarterfinals on New Year’s Day. Starting quarterback Behren Morton has exhausted his college eligibility, and sophomore backup Will Hammond suffered an ACL injury in October. After making headlines for its portal additions last offseason, Tech has again been active early in this year’s transfer window.
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