Between fair play and regulation: Current compliance risks for stakeholders in the sports sector

Introduction

On the pitch, the principle of fair play has always played a central role: rules must be followed, and violations can result in penalties such as dismissals, suspensions or point deductions. But even off the pitch, sports stakeholders are obliged to adhere to the rules and act lawfully.

Contrary to expectations, many sports clubs and associations – unlike most “traditional” commercial enterprises – still lack comprehensive compliance structures to minimize potential liability risks for the organization itself or its employees. Therefore, in many cases, compliance with criminal or administrative regulations only becomes a focus for sports stakeholders once a legal breach or serious suspicion has already occurred. As a result, athletes, coaches, officials, clubs and associations repeatedly find themselves under investigation by authorities, which can result not only in severe sanctions but also in significant reputational damage.

In practice, compliance topics such as anti-money laundering, anti-corruption, the investigation of harassment and abuse cases, and the growing relevance of economic sanctions are becoming increasingly important for sports clubs and associations. This article examines these compliance risks in greater detail and highlights the legal pitfalls that affected stakeholders may face.

Anti-corruption

In addition to money laundering risks, corruption is one of the most common criminal law challenges faced by stakeholders in the sports sector. This does not only concern high-profile issues such as the awarding of major events or large-scale sponsorship deals, but also more everyday situations where economic interests may conflict with personal gain. Typical examples include gifts from sponsors to club employees, commissions in the context of player transfers, or exclusive VIP invitations extended to public officials.

Whether such benefits are legally problematic depends largely on Sec. 299 StGB in the private sector, and Sec. 331 et seq. StGB in the case of public officials. The key question is often whether the benefit can still be considered “socially appropriate”; in other words, whether it constitutes a permissible and customary gesture. This assessment can be difficult in individual cases and always requires a careful examination of the specific circumstances. Beyond potential criminal liability, corruption-related risks may also result in administrative fines for senior figures within a sports club or association, as well as for the organization itself (cf. Sec. 130, 30 OWiG).

To avoid such risks and the challenges of distinguishing between acceptable and unacceptable conduct, sports clubs and associations should implement clear anti-corruption compliance measures within their operations. These should include binding policies on gifts and invitations, regular staff training to raise awareness, transparent decision-making processes to ensure accountability in critical situations, and accessible whistleblowing systems for reporting potential violations.

Anti-money laundering

In professional sports operations, large sums of money are often transferred between various parties, sometimes at very short notice. Typical examples include payments related to player transfers, sponsorship agreements, or prize money. Whenever doubts arise regarding the origin of these funds, sports organizations are frequently faced with the question of whether accepting such payments is legally permissible, as accepting money derived from criminal activities (i.e. funds originating from illegal dealings of the contractual partner) can easily lead to criminal liability for money laundering under Sec. 261 para. 1 of the German Criminal Code (Strafgesetzbuch – StGB). Individuals directly involved on behalf of a sports club or association (such as those responsible for transfers) may quickly face severe penalties, including imprisonment or substantial fines. This is particularly critical because, unlike many other criminal offences, even reckless behavior – in other words, gross negligence – may suffice to meet the threshold for money laundering (cf. Sec. 261 para. 6 StGB). Moreover, senior figures within a club or association – such as sporting directors, board members or presidents – may face fines of up to one million euros if money laundering occurs within the organization due to breaches of supervisory duties (cf. Sec. 130 of the German Administrative Offences Act – Ordnungswidrigkeitengesetz, OWiG). The club or association itself may also be subject to fines of up to ten million euros (cf. Sec. 30 OWiG), and any unlawfully obtained profits may be skimmed off (Sec. 17 para. 4 OWiG).

Against this background, it is essential for sports clubs and associations to carefully scrutinize the origin of incoming funds whenever suspicions arise. This is particularly relevant for payments from jurisdictions considered high risk under anti-money laundering regulations, for complex payment structures, or when there is unusual time pressure from the contractual partner without a clear justification. Where such measures are not yet in place, robust compliance procedures should be integrated into the operational workflows of sports organizations to identify and manage money laundering risks effectively. This is especially pertinent for professional football clubs and football agents: under the recent EU Anti-Money Laundering Package and Regulation (EU) 2024/1624, they will be classified as “obliged entities” from 10 July 2029 onwards. From that date, they will be required to comply with extensive due diligence obligations under anti-money laundering law, which may apply to certain types of transactions.

Whistleblowing and sexualized/interpersonal violence

One of the most sensitive compliance-related areas in sport concerns sexualized and interpersonal violence. Power imbalances, dependency relationships, and often hierarchical training and club cultures can make the sporting environment particularly vulnerable to various forms of abuse – both physical and psychological. Young athletes are especially at risk, as their career prospects often depend heavily on coaches and club officials. Under German criminal law, the various forms of sexualized violence are largely covered by the “offences against sexual self-determination” (Sec. 174 et seq. StGB). In particular, when club officials or other responsible persons commit criminal acts of violence by exploiting the authority of their position (as may be the case with coaches) or when the specific conditions of the sporting environment enable such acts, this also typically constitutes a compliance-relevant organizational offence under Sec. 30 and 130 OWiG.

Despite growing media attention and recent revelations, the number of unreported cases in this area is likely to remain high, as victims often remain silent out of fear of reprisals or stigmatization. A thorough (potentially interdisciplinary) review and the implementation of preventive measures, such as independent reporting systems, good governance functions, and awareness training, are essential to establish legally sound and respectful structures in both professional and amateur sport over the long term.

In this context, whistleblower protection and athletes’ rights have gained momentum and visibility in recent years, driven by tighter national and international regulation and the advocacy of organizations such as Athleten Deutschland e.V. For example, clubs, associations and sports companies with 50 or more employees are now required under the German Whistleblower Protection Act to establish appropriate reporting systems through which individuals can (anonymously, if necessary) report potential legal, compliance or integrity violations. Such reporting channels and complaints procedures have also been implemented in the context of major sporting events – most recently during the UEFA European Championship 2024 in Germany – to capture, assess and, where appropriate, escalate potential violations of human rights, ethical standards and other legal breaches to the relevant authorities.

EU sanctions law implications

EU sanctions and embargo measures represent a compliance area in sport that is still often underestimated. However, the structures and mechanisms within the sports sector (can) give rise to a wide range of sanctions-related compliance risks for clubs, associations, officials and other stakeholders. Depending on the applicable EU sanctions regime, these risks may stem from various sources – ranging from “classic” individual measures (such as asset freezes and prohibitions on making funds available) to restrictions related to goods, capital markets and financial transactions.

These risks become particularly tangible in the context of international player transfers. In such cases, clubs must ensure that no “funds” or “economic resources” are made available to listed individuals or to persons who are deemed to be “owned” or “controlled” by a sanctioned individual under EU sanctions law – even indirectly (known as the indirect provision prohibition). Given the broad interpretation of this prohibition, it may cover not only transfer fees but also the mere conclusion of a transfer agreement or the assignment of player or transfer rights. During the payment process, sector-specific EU sanctions, such as transaction, investment or deposit bans, may also come into play.

In light of an increasingly complex and overlapping regulatory landscape, the tightening and harmonization of European sanctions criminal law, and the unpredictable reputational risks involved, sports stakeholders should assess their specific sanctions-related risk profile and exposure – taking into account the unique characteristics of the sports sector – as no sector-specific exemption currently exists for sport under EU sanctions law.

Conclusion

The topics outlined above clearly demonstrate that stakeholders in the sports sector are increasingly confronted with complex legal requirements in the field of compliance. A targeted approach to addressing risks related to money laundering, corruption, interpersonal misconduct and sanctions law is therefore essential to minimize liability and ensure legally sound operations within sporting organizations. The principle of fair play should therefore not only be understood as a sporting ideal, but also as a guiding framework for lawful conduct within sports institutions and organizations.