Is Skool a Pyramid Scheme? Addressing the 2026 Controversy
TLDR: Skool is a legitimate SaaS platform that charges a flat monthly subscription to host online communities and courses. It has a single-tier affiliate program paying 40% recurring commissions, which is aggressive but structurally nothing like a pyramid scheme or MLM. The confusion stems from how loudly people promote it, not from how the business actually works.
As Skool has crossed 20 million users and 200,000 communities in 2026, the "pyramid scheme" accusations have gotten louder. That's predictable. Any platform with a high-commission affiliate program and a loud influencer fanbase is going to attract skepticism. But loud promotion is not the same as fraud, and it's worth separating the noise from the facts.
What Skool Actually Is
Skool is a community-first SaaS platform founded in 2019 by Sam Ovens, built to combine a social feed, course hosting, and gamified engagement into one product. In January 2024, Alex Hormozi became a co-owner and invested heavily in the platform's growth, which is when the visibility — and the controversy — escalated. The core product is simple: pay a flat $99/month, build a community, charge your members whatever you want.
The platform hosts over a billion dollars in total earnings across its creator communities, making it one of the fastest-growing community platforms in the world. Revenue comes from software subscriptions, not from recruitment. That distinction matters enormously when evaluating MLM claims.
The Affiliate Program: Where the Confusion Starts
Skool offers a 40% recurring lifetime commission to anyone who refers a new group creator to the platform. That's genuinely high compared to the SaaS industry standard of around 20% for 12 months. It's also why nearly every "Skool review" you'll find online has a referral link attached.
Here's the critical detail: the affiliate program is one level deep. You refer someone, you earn on their subscription. There are no tiers, no downlines, no recruitment chains where the person you recruited must then recruit others for you to earn. That's the structural definition that separates a standard affiliate program from an MLM. Skool's own affiliate page confirms this plainly — the attribution is automatic when a member creates a group from yours, but the commission structure stops at one level.
What a Pyramid Scheme Actually Requires
According to the FTC, a pyramid scheme is characterized by participants paying money to a company in exchange for the right to sell a product and the right to receive rewards for recruiting other participants that are unrelated to actual product sales. The NY State Attorney General adds that the scheme depends on an ever-increasing number of recruits to sustain payouts — a structure that inevitably collapses. Neither applies to Skool.
Skool sells a tangible software product. Community leaders build audiences, sell memberships, host courses, and run coaching programs entirely independent of the affiliate program. A creator can run a $50,000/month community on Skool and never refer a single person to the platform. The affiliate program is optional and supplementary, not the primary income mechanism for the vast majority of users.
As one Reddit commenter with MLM industry knowledge put it plainly: "It's not an MLM. I'm strongly against MLMs. There's no pyramid scheme, network marketing, or direct sales. What users see when they sign up is a standard affiliate plan used by all other platforms."
The Skool Games: Gamification, Not a Recruitment Funnel
The Skool Games is an internal engagement and leaderboard system designed to incentivize community participation — completing courses, posting, interacting, and attending events. It's often cited alongside MLM accusations because it rewards participation in ways that can look like a points-based recruitment scheme from the outside.
In reality, the Skool Games functions as a community retention tool, not a recruitment engine. Points are earned through genuine platform engagement, and leaderboards are community-specific. The gamification makes members more likely to stay subscribed and complete courses, which benefits community owners but creates no obligation or financial incentive for members to recruit others.
Legitimate Criticisms Worth Acknowledging
To be fair, Skool does have real criticisms that go beyond the MLM question. The platform's 40% commission rate creates a strong financial incentive to publish biased positive reviews, which erodes trust in the information ecosystem around it. The $99/month entry price, while competitive against tools like Kajabi, is steep for new creators — and the transaction fees add up as revenue grows.
There's also an ecosystem problem: because so many coaches and influencers have built communities specifically about making money on Skool, the platform can look from the outside like a self-referential money-making loop. That's an aesthetic and cultural issue, not a structural legal one. Any social platform — Facebook, LinkedIn, Discord — can host bad-faith operators.
The Bottom Line
Skool is a SaaS platform. Its revenue comes from software subscriptions. Its affiliate program is single-tier and optional. Its growth is driven by a real product with 20 million users who pay to access communities built on its infrastructure. Calling it a pyramid scheme requires redefining what the term means to the point where it would also apply to Dropbox, Shopify, or any other software company that offers referral commissions.
If you want to explore the platform yourself, Skool offers a free trial so you can evaluate the product before committing to the $99/month subscription. The question isn't whether Skool is a scam. The question is whether it's the right tool for your community-building goals.
FAQ
Is Skool an MLM?
No. Skool has a single-tier affiliate program. There are no downlines, no recruitment obligations, and no multi-level commission structures. A single-tier referral program is a standard feature of most SaaS companies. The FTC's own definition of an MLM does not apply here.
Does Skool require you to recruit others to make money?
No. The majority of Skool creators earn through membership subscriptions, courses, and coaching programs with no involvement in the affiliate program whatsoever.
What is the Skool Games?
The Skool Games is a gamified engagement system within Skool communities that rewards members for participation activities like completing courses, posting, and attending events. It is a retention and engagement tool, not a recruitment mechanism.
How much does Skool cost?
Skool currently runs at $99/month for the Pro plan, which includes unlimited members, unlimited courses, and access to all platform features. There is also a Hobby plan at $9/month with a 10% transaction fee. You can compare it directly against alternatives like Kajabi to see which fits your needs.
Who founded Skool?
Skool was founded in 2019 by Sam Ovens. Alex Hormozi joined as a co-owner in January 2024 and has been the platform's most visible public advocate since.
Can people run actual pyramid schemes inside Skool?
Theoretically, bad actors can misuse any platform. But the platform itself is not a pyramid scheme, in the same way that a bad business running on Shopify doesn't make Shopify a scam. The California AG's definition of pyramid schemes makes clear the issue is always structural, not superficial.
Is the 40% affiliate commission a red flag?
It's a high commission rate, which does create an incentive for biased reviews. But a high commission rate on a legitimate software product is a marketing decision, not evidence of fraud. The concern worth monitoring is whether the affiliate ecosystem produces honest information — not whether the commission itself is illegal.