Current Law Overview
Texas law allows college athletes to earn NIL compensation, enter representation agreements, and receive direct payments from their institution without losing eligibility. Texas's most distinctive structural feature is an automatic update provision—state law adjusts to reflect changes in NCAA and federal rules without the legislature needing to pass new bills each cycle. The most significant pending development for Texas is federal: the Protect College Sports Act would, if enacted, replace Texas's state framework with a single national standard.

NIL

Texas's original NIL law (2021) established the baseline structure permitting college athletes to earn NIL compensation. HB 126 (effective June 5, 2025) substantially expanded those rights. Under current Texas law:

• Universities may directly compensate athletes for the use of their NIL, aligning with the House settlement's direct revenue-sharing framework. Schools can also work with third-party entities to facilitate NIL opportunities.

• Athletes must disclose proposed NIL contracts to their institution before signing. Contracts cannot conflict with institutional or team contracts and cannot be used as recruiting inducements or tied to athletic performance.

• All NIL payments must be tied to actual services rendered and based on fair market value—Texas law makes this explicit. A payment not tied to real commercial services or not at market rate is not a legitimate NIL deal under Texas law.

• NIL contracts with companies selling tobacco, gambling products, or adult entertainment are prohibited.

• Athletes under 17 may not enter any NIL contract. Athletes who are 17 may sign NIL deals—including deals tied to future college enrollment—but payment cannot begin until they officially enroll at their institution.

 

Texas NIL law contains an automatic update provision: as NCAA rules and federal law evolve, Texas's NIL laws update to reflect those changes. This gives Texas programs more regulatory stability than states whose laws can fall out of sync with national developments. But it also means that if the Protect College Sports Act passes, Texas law would automatically update to reflect federal preemption.

Any NIL deal valued at or above $600 must be reported through the NILGo platform within five business days (federal/NCAA obligation applicable to all Division I schools).

Key Compliance Obligation: The fair market value requirement is both a legal and a compliance exposure point. A payment structured as NIL but not tied to actual commercial services at market rate is not a legitimate NIL deal; it's a disguised recruitment payment. Your compliance office should have a review process that evaluates whether proposed NIL contracts involve genuine commercial services and whether the compensation reflects what the market would actually pay for that athlete's NIL at that time. For high-profile athletes, document your fair market value analysis. For athletes with limited public profiles, a $500,000 "NIL deal" is not defensible at market rate.

Rev-Share

The House settlement allows universities to pay student athletes directly for their participation in a sport. Schools may budget $21.3 million (2026-27) toward direct athlete payments. HB 126 explicitly aligned Texas law with the settlement's terms.

Key Compliance Obligation: Rev-share agreements must be documented and structured separately from NIL contracts. Title IX compliance is an ongoing obligation with every distribution decision. Texas has some of the largest athletics budgets in the country—the scale of rev-share distributions at programs like Texas and Texas A&M makes a rigorous Title IX analysis framework not optional.

Be mindful of Title IX compliance. 

Agent Law

Texas athlete agents are governed by Texas Occupations Code Chapter 2051. Texas has a two-tier registration structure not found in most states.

Registration—Two Types:
Professional Athlete Agent: An agent who represents athletes in sports with a national professional sports association (NFL, NBA, MLB, etc.) must be certified by that association before they can register with the Texas Secretary of State.

Limited Athlete Agent: An agent who represents athletes in sports without a national professional sports association may register as a limited athlete agent—they may only represent athletes in that sport.

 

• For compliance directors: an agent who is registered as a "limited" agent has a narrower authorization than one registered as a professional athlete agent. Verify not just registration, but which type.

 

• Registration with the Texas Secretary of State is required before any agent may recruit, solicit, or represent an athlete. Annual renewal required.

 

• Bond Requirements: $50,000 surety bond required for registration. If the agent provides financial services or enters a financial services contract with an athlete, a separate $100,000 bond is required. The financial services bond requirement is a distinctive Texas provision. An agent who is managing an athlete's money needs significantly more financial security posted than one who is only handling representation.

 

• Written Contract Required: All agent contracts must meet the requirements of Texas Occupations Code Chapter 2051, including required disclosures in boldface 10-point type notifying the athlete that the agent is registered with the Texas Secretary of State and that registration does not imply endorsement of the agent's competence or contract terms.

 

• 16-Day Cancellation Right: Athletes have the right to cancel any representation agreement within 16 days of signing.

  • Athletes cannot waive this right.

  • If canceled within 16 days, the athlete owes no consideration and must not return any consideration already received.

  • Texas's 16-day window is longer than Ohio (10 days) and Arizona (14 days) but significantly shorter than California (90 days).

 

• 72-Hour Notice Requirement: Both the athlete and the agent must notify the athletic director within 72 hours of signing a representation agreement, or before the athlete's next practice or competition, whichever is earlier. This mirrors Ohio's requirement and is a hard deadline on both parties.

Agents must also comply with the federal Sports Agent Responsibility and Trust Act (SPARTA).

Key Compliance Obligation: Texas's two-tier registration structure means you need to verify not just that an agent is registered but what type of registration they hold. A limited athlete agent approaching a football or basketball player—sports with national professional associations—is operating outside their authorized scope. Your compliance office should confirm registration type with the Texas Secretary of State, confirm the bond is current, and confirm whether a separate financial services bond is required based on the services being provided to the athlete.