A new law signed by Arizona Gov. Katie Hobbs last week authorizes the state’s four Division I universities to directly pay students for their name, image and likeness.

Senate Bill 1615, which went into effect on May 7, states that universities cannot classify athletes as employees.

The law also allows universities to engage with third-parties to “facilitate opportunities” to compensate athletes without enforcement from the NCAA or other governing bodies.

“The bill allows the university to partner with a third-party entity that is dedicated to secure deals beyond the university’s brand, creating more NIL opportunities for students,” Jason Corriher, Arizona senior associate athletic director for strategic communications, told Howard Fischer of Capitol Media Services.

The timing of the legislation comes as college athletic department await a ruling in the House vs. NCAA settlement. California federal judge Claudia Wilken is expected to approve a $2.8 billion settlement that would, among other things, allow schools to directly pay athletes a portion of an athletic department’s revenues, capped at $20.5 million, beginning July 1, 2025.

If the settlement is rejected, schools could still pay athletes directly if their state governments allow.

Braly Keller, director of collegiate services and insight for NIL firm Opendorse, praised the bill, saying on X that “Arizona quickly went from one of the shortest and more dated NIL laws to a robust policy.”

Arizona athletic director Desireé Reed-Francois championed a first-of-its-kind Missouri NIL bill in 2022 during her time as Mizzou’s AD. That bill allowed high school recruits to earn NIL as long as they sign with a school in the state.

Reed-Francois told the Arizona Daily Star’s Bruce Pascoe that the Arizona legislation will keep the state competitive in the evolving NIL landscape.

“SB 1615 ensures the University of Arizona has the tools and structure to remain nationally competitive in recruiting and retaining top student-athletes,” she said. “The bill provides greater clarity around the rights and protections of student-athletes engaging in NIL activity.”

The bill, which was sponsored by Sen. TJ Shope (R-Coolidge), gives universities at least one new way to raise money that can be shared with athletes: 50/50 raffles.

Arizona previously required that half the money raised through raffles be distributed to a pre-selected entity like a charity. Under the new law, universities can disperse raffle revenues to athletes.

For example, If Arizona Stadium holds a 50/50 raffle this fall and $100,000 are put in the pot, the Arizona athletic department can hold on to $50,000 and use it to pay athletes.

The raffle funds are an avenue for Arizona athletics to raise the $20.5 million that can be paid directly to students under the pending House settlement.

Arizona will spend most of the $20.5 million on football and men’s basketball players, with the remaining money going towards athletes in other sports.