Money Laundering in Football: The Not So Beautiful Game?

In May 2015, US federal prosecutors charged nine senior executives associated with the Fédération Internationale de Football Association (FIFA) with racketeering, wire fraud and money laundering. It was alleged they had received bribes of more than $150 million in relation to the awarding of media and marketing rights for some of the biggest football games in the world. The revelations, and the further scandals that have plagued FIFA, revealed the murky underbelly of the so-called beautiful game.

Football is the ‘richest sport in the world’, with an estimated net worth of $600 billion (£470 billion). In 2019, the European Commission identified professional football as an ‘obvious candidate’ for money laundering and deriving illegal income. According to a report from Europol, there are close links between organised crime groups and sports corruption, with betting-related match-fixing creating a steady stream of criminal income. For organised criminals, ‘football remains the most targeted and manipulated sport’. Despite the apparent endemic corruption and illicit funds flowing through the game, the European Commission concluded – in a wonderfully understated fashion – that the sector’s legal framework was ‘inadequate’ to manage the risks of money laundering and terrorist financing.

Parking the Bus

Nearly a decade on from the corruption scandal that rocked FIFA, the EU is attempting to clean up professional football. After intense negotiations, the recently approved anti-money laundering (AML) package will, for the first time, bring high-level professional football clubs, football agents and European football associations into the scope of the EU’s AML framework. Recognising that this may be a significant change for the sector, the new rules have a five-year implementation period, and member states are able to exclude football clubs and agents from their national AML regulations if they consider them to be low-risk.

There are a multitude of ways that money can be laundered through football. Back in 2009, the Financial Action Task Force (FATF), the international anti-financial crime standard-setter, warned that the proceeds of criminal activities could be funnelled through financial transactions including the purchase of clubs, the transfer of players, betting activities, image rights, and sponsorship and marketing arrangements. Not much has changed in the last 15 years. Corruption also remains rife in football: in October 2023, it was announced that Spanish football giants Barcelona and the club’s president were under investigation for bribing the Spanish football federation's refereeing committee.

The EU’s new rules will require in-scope clubs and agents to assess their AML risks and put in place mitigating procedures, including Customer Due Diligence (CDD) and ongoing monitoring, as well as obliging them report suspicious transactions. While it remains to be seen exactly how these requirements will be implemented both by clubs and by member states, the EU is clearly hoping to shore up the defences of European football.

Big Man Up Front

Not just a haven for the proceeds of crime, football has long been seen as a weapon of soft power. From the 1934 World Cup, held in Mussolini’s Italy, to the more recent staging of the tournament in Russia and Qatar, aligning one’s country on the world stage with FIFA’s values of fair play, fighting against discrimination and racism, and protecting human rights can be an effective propaganda tool. Kleptocratic wealth has also found a home in professional football: following Russia’s full-scale invasion of Ukraine in 2022, Russian oligarch Roman Abramovich was sanctioned by the UK government, forcing him to sell Chelsea FC after 19 years of ownership. During the course of his ownership, Abramovich spent over £2 billion on players and managers. It is also alleged that Everton FC received more than £400 million from companies connected to oligarch Alisher Usmanov between 2018 and 2022, when sanctions were also imposed on Usmanov.

Amid allegations of ‘sportswashing’, some regimes have ploughed incredible sums of money into professional football. Investment from Saudi Arabia’s Public Investment Fund (PIF) has seen the Saudi Pro League become one of the highest-spending leagues in the world, attracting global – albeit fading – superstars such as Cristiano Ronaldo, Karim Benzema and Sadio Mané. In 2023, Cristiano Ronaldo become the world’s highest-paid athlete, signing a contract with Riyadh-based Al Nassr worth £3.4 million a week. In 2021, PIF also bought Newcastle United for £300 million, leading Amnesty International to call for the Premier League to revise its tests for the suitability of owners and directors of clubs. Newcastle United are just one of 15 teams in the Premier League this season who have majority owners from outside the UK. Fans of Reading FC, who currently play in the third tier of English football but were a Premier League club a decade ago, are watching as the club is ‘dying before fans’ eyes’ as a result of the financial mismanagement of the club under its current Chinese owner, Dai Yongge. European clubs have also benefited from huge investments from overseas: Qatar Sports Investment, a subsidiary of the country’s sovereign wealth fund, bought Paris Saint-Germain in 2011, flooding its benches with talent and allowing it to dominate French football (although the club has been investigated several times for breaches of UEFA’s Financial Fair Play rules).

A Game of Two Halves

While the EU looks to address the issue of dirty money in football via its AML regulations, questions remain as to whether the UK will follow suit. According to Deloitte’s 2023 Annual Review of Football Finance, revenues for the European football market grew to €29.5 billion in the 2020/21 season. The Premier League is at the top of the list, generating £5.5 billion that year.

As the richest and most-watched football league in the world, the Premier League – and, to some extent, the other tiers of English and Scottish football – is an attractive target. In December 2023, the Securities and Exchange Commission charged a Nigerian businessman, Dozy Mmobuosi, in relation to a ‘staggering’ fraud. Nine months earlier, Mmobuosi was close to buying Sheffield United, then in the second tier of English football but now a Premier League club, for £100 million until the deal fell apart. A 2021 investigation by Al Jazeera showed how easily English football clubs could be bought by criminals. Going undercover, investigators made contact with a middleman who described how he could, for a fee, ‘hide a criminal’s money and identity behind offshore trusts and submit fraudulent due-diligence reports to English football authorities’.

Questions have also been raised about the source of the many billions in sponsorship revenue that Premier League clubs receive. A recent report from the UN Office on Drugs and Crime highlighted that, in January 2023, eight Premier League football clubs were ‘partnered with Asian-facing betting companies’. All eight partner companies have UK gambling licences through the same unnamed company which has been linked to Alvin Chau Cheok-wa, convicted in January 2023 of over 100 charges relating to illegal betting. He is alleged to lead an organised crime group operating across Southeast Asia involved in underground banking, money laundering and tax evasion.

The deep-seated issues with English football clubs, in particular, have not gone unnoticed by policymakers. The King’s Speech at the opening of the current Parliament promised that ‘legislation will be brought forward to safeguard the future of football clubs for the benefit of communities and fans’. This is likely to include a new independent regulator responsible for, among other things, ensuring that clubs comply with financial regulation. Whether the remit and powers of any new regulator will be sufficient to address the many issues facing both football clubs and their fans remains to be seen.

All to Play For

With a five-year implementation period, it will be a while before we can judge whether the EU’s AML package makes any meaningful difference. The signs are not promising – supervision and enforcement of existing AML regulations around the world is woefully inadequate, described as a ‘festering sore of financial system oversight around the world’. Bringing new sectors into the scope of a system which is already struggling to cope may end up being counterproductive.

While the EU’s decision is a welcome acknowledgment of the need to do something to address the dirty money that seemingly underpins the modern game, the complexity and scale of the issues at hand – corruption, kleptocracy, transnational organised crime – will take more than the application of CDD to solve.

For the UK, where the issues seem particularly acute, the introduction of a new independent regulator could offer the chance to reform the sector. The UK could look to follow the EU’s example and bring football clubs into the scope of the Money Laundering Regulations; the upcoming National Risk Assessment would be the vehicle to do just that. In recent years, the Premier League has shown an appetite for robust action against breaches of its financial rules, but has struggled to impose any meaningful penalties on clubs beyond points deductions or fines, neither of which are helpful if a club is struggling to balance its books. If the Premier League – or another regulator – were to show a similar appetite for tackling breaches of money laundering laws and were given sufficiently tough powers, such as the ability to seize a football club or to force its sale when it could be proved that the club was being used to launder the proceeds of crime, it may start to turn the tide. This seems very unlikely though, not least because it would more than likely result in an expensive and lengthy battle against clubs with some very deep pockets.

It doesn’t look like the money is going to stop anytime soon. While football continues to attract and generate many billions of pounds a year across the world, imposing AML regulations seems like a worthy but ultimately fruitless exercise. Underfunded and under-resourced enforcement agencies are never going to be able to compete on the pitch.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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