Arizona Revised Statutes

Ariz. Rev. Stat. § 44-1731 (2026)

Definitions

✓ current as of May 2026
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In this article, unless the context otherwise requires:

1. "Compensation" includes a payment based on a sale or distribution made to a person who either is a participant in a pyramid promotional scheme or has the right to become a participant upon payment.

2. "Consideration" means the payment of cash or the purchase of goods, services or intangible property but does not include:

(a) The purchase of goods or services furnished at cost to be used in making sales and not for resale.

(b) Time and effort spent in pursuit of sales or recruiting activities.

3. "Pyramid promotional scheme" means any plan or operation by which a participant gives consideration for the opportunity to receive compensation which is derived primarily from any person's introduction of other persons into participation in the plan or operation rather than from the sale of goods, services or intangible property by the participant or other persons introduced into the plan or operation.

Notes of Decisions
Cited in 3 cases, 1982–1991 · leading case: State v. Lycett, 650 P.2d 487 (Ariz. Ct. App. 1982).
State v. Lycett, 650 P.2d 487 (Ariz. Ct. App. 1982). · cites it 29× “She timely filed a notice of appeal and raises three issues for our consideration: (1) whether A.R.S. § 44-1731 is unconstitutionally vague and overbroad; (2) whether A.”
State Ex Rel. Corbin v. Challenge, Inc., 725 P.2d 727 (Ariz. Ct. App. 1986). · cites it 20× “The appeal presents for our consideration the following issues: (1) whether there were substantial issues of material fact that should have precluded the granting of partial summary judgment; (2) given the substantial dispute as to the facts, whether the trial court could…”
State v. Padilla, 817 P.2d 15 (Ariz. Ct. App. 1991). · cites it 5× “§ 44-1731 does not begin to encroach on any constitutionally protected activities. In this case, the speech and conduct proscribed by § 44-1731 which encourages others to join a pyramid scheme is what is specifically made illegal under the terms of the statute, and does not…”
— Ariz. Rev. Stat. § 44-1731(C) — 2 cases
State Ex Rel. Corbin v. Challenge, Inc., 725 P.2d 727 (Ariz. Ct. App. 1986). “The appeal presents for our consideration the following issues: (1) whether there were substantial issues of material fact that should have precluded the granting of partial summary judgment; (2) given the substantial dispute as to the facts, whether the trial court could…”
State v. Lycett, 650 P.2d 487 (Ariz. Ct. App. 1982). “She timely filed a notice of appeal and raises three issues for our consideration: (1) whether A.R.S. § 44-1731 is unconstitutionally vague and overbroad; (2) whether A.”
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