Betting regulation breaches in football — what can clubs do to remedy and reduce risks?

Following an investigation by the Italian Football Federation (FIGC), Newcastle United midfielder Sandro Tonali has received a €20,000 fine and a ten-month ban from all football activity after being found guilty of breaching betting regulations.

Tonali only joined Newcastle United in July. With Premier League clubs spending a record £2.36bn in the latest transfer window, prospective signings are subject to forensic due diligence — including extensive scouting, historic social media reviews and procuring character references from trusted sources.

So how does a betting regulation breach by a £55m signing fly under the radar? And what remedial steps can Newcastle United take?

Here, Adam Murphy — a commercial litigator and member of our sports sector team — explores.

A spate of recent breaches

Italy international Tonali’s employer club — Newcastle United — will now be forced to consider the legal ramifications of the ban and the remedies available from an employment and commercial law perspective.

Yet with a spate of recent breaches of betting, match fixing and inside information rules (such as Toney, Toffolo and Tonali, to name but a few) there are wider lessons to be learned — particularly around what preventative measures clubs can implement to mitigate against the risks of breaches.

Remedies for the employer club

In terms of the immediate remedies available to the employer, separate actions could be considered against both the player themselves and the selling club (AC Milan) — though the availability of such remedies will be dictated by the facts (or the employer’s ability to prove the facts) and the contracts between the parties.

Club remedies against the player

Firstly, the club could consider terminating the contract with the player. Subject to the contractual provisions, the employer club could also consider other disciplinary sanctions, such as fines.

Most Premier League contracts are — in the interests of the various stakeholders (the Premier League, clubs, The FA, etc.) — largely standardised and contain standard clauses that spell out the players’ obligations.

For example, the player will sign to agree not to bring the club into disrepute or cause the player or the club to be in breach of applicable rules (such as the rules and regulations of FIFA, UEFA and The FA).

Tonali’s conduct in breaching gambling regulations could give rise to dismissal on grounds of gross misconduct. Rule E3.1 in The FA Handbook 2023/2024 contains a ‘catch-all’ rule on misconduct relating to general behaviour.

This provides that:

“A Participant shall at all times act in the best interests of the game and shall not act in any manner which is improper or brings the game into disrepute…”

While The FA also has its own provisions relating to ‘betting’ and suspensions for participants, in the Tonali case the investigation was conducted by the FIGC and an agreed suspension was reached by an agreed plea on the part of the player. The agreed sanction has now been ratified by FIFA and made applicable to England.

It’s important to note that the approach of the Premier League club might differ to the approach of other clubs faced with this scenario up and down the football pyramid, as well as on a player-by-player basis.

As a marquee signing for Newcastle United, Tonali came with a significant price tag and is contracted until 2028. He is already very popular among the fanbase (and has his own chant). Accordingly — not least because of the significant transfer fee — there doesn’t appear to be a commercial or strategic benefit to terminating the player’s contract.

However, if a high-earner at a lower league club had committed such a breach, the feeling might be that terminating the contract could align with the club’s objectives — particularly if that player wasn’t fancied by the current manager or there were internal financial pressures to ‘balance the books’ at the club. Undoubtedly, The PFA (Professional Footballers' Association) would have something to say about such action.

Club remedies against the selling club

The handing down of a suspension raises the obvious question — to what extent were the selling club (AC Milan) aware of Tonali’s conduct, breach and the FIGC investigation at the point of sale?

In this year’s summer transfer window, Newcastle United entered into transfer negotiations with AC Milan for the signing of Tonali. In July, the conclusion of those negotiations would have seen the agreed terms documented in a transfer agreement.

Unlike player contracts, transfer agreements are far from standardised. In the same way that B2B contracts will contain ‘buyer friendly’ and ‘seller friendly' terms, the scope for legal action will depend on the contractual provisions and on what terms the contract was concluded — particularly the wording of any warranty and indemnity clauses in the event of breach.

If the transfer agreement was contracted on the selling club’s terms, as a starting point (and subject to the extent that they were substantially negotiated) those terms will likely be narrow in scope and limit the ability of the buying club to pursue the selling club for the events that have followed. The buying club will be left picking up the pieces.

On the other hand, if the negotiations were more protracted and the buying club’s representatives successfully negotiated more ‘buyer-friendly’ terms, the warranty and indemnity clauses may be broader in scope and open the door to advance a claim for breach of contract, warranty or indemnity. For example, the warranty and indemnity clauses could be drafted to include a contractual promise from the selling club that the player isn’t subject to any regulatory or other legal investigations.

Given the international nature of this transfer, any dispute would fall to be determined by FIFA and likely be subject to Swiss Law, as well as the relevant regulations.

PR considerations for the employer club

Sandro Tonali’s agent — Giuseppe Riso — has expressed concern for his client, citing mental health issues for what he describes as a gambling addiction. Indeed, there has been a call for compassion and empathy for the player in the media.

Clearly, preventative steps should be taken by the club to avoid such circumstances, but Newcastle United don’t have the fortune of such hindsight. Once a punishment has been handed to a player, from a public relations perspective it’s crucial for matters to be approached sensitively, particularly under the microscope of social media. There will be a need for clubs to strike a balance between deterring such conduct and sympathising with the modern-day pressures and mental health issues in professional football.

Rather than taking a hard-line commercial approach by poring over and enforcing specific contractual provisions, clubs are often better placed to look at the bigger picture — as has been the case here, with Newcastle United publicly vowing to offer full support to the player during his ban and recovery.

How can clubs prevent betting rule breaches?

There are wider learnings in the wake of Tonali’s ban and other clubs will no doubt be revisiting their current policies and transfer procedures.

Clubs should look to:

• Ensure that robust transfer templates are adopted.
• Produce standardised questionnaires to prospective players and their representatives, in writing.
• Consider requesting signed undertakings from the player and/or agent to confirm that they aren’t subject to investigation for betting activity or any other regulatory or legal investigation or disciplinary process.
• Include provisions in the players’ handbook and/or code of conduct relating to betting regulations and the consequences for a breach.
• Deal on their own terms in transfer negotiations (where possible) and ensure that all aspects of the contract are properly reviewed, understood and negotiated.
• Revise and expand internal training and education measures around gambling.
• Encourage transparency and honesty and make psychological support available for players who are experiencing gambling addiction.

Given the recent increase in betting breaches, it may even be that bespoke insurance policies are developed for clubs to secure coverage in the event that their player employees breach betting regulations (similar to insurance around long-term injuries).

Talk to us

Given the rise in instances of betting rule breaches, most clubs would be well advised to revisit their policies and procedures, both for negotiating incoming transfers and offering guidance to existing players.

If you need help with any of this, talk to our sports law experts.