In brief
- Westminster Magistrates’ Court has extended an account freezing order over more than £10 million held by the Premier League while the National Crime Agency (NCA) continues an investigation connected with the league’s former fantasy football partner, Sorare. The Court expressly found that there was no suggestion that the Premier League itself had engaged in unlawful conduct. (Courts and Tribunals Judiciary)
- Separately, Sorare is being prosecuted by the Gambling Commission for allegedly providing gambling facilities in Great Britain without an operating licence. Sorare contests the charges and its trial is currently listed for June 2027. (Gambling Commission)
- The case highlights an increasingly important risk for sports organisations: regulatory or financial-crime issues affecting a commercial partner can have direct consequences for the rights-holder, even where the rights-holder is not accused of wrongdoing.
Background
In January 2023, the Premier League announced a four-year licence with Sorare, allowing the digital sports company to issue officially licensed digital player cards featuring players from all 20 Premier League clubs. Users could collect, buy and sell the cards and use them to compete in Sorare’s fantasy football game. (Premier League)
The partnership was entered into against an evolving regulatory backdrop. In October 2021, the Gambling Commission had announced that it was considering whether Sorare’s activities required a gambling operating licence.
According to evidence subsequently considered by Westminster Magistrates’ Court, the Premier League was aware of that regulatory scrutiny before entering into the agreement. It met Sorare and obtained a summary of legal advice commissioned by the company. The Court noted, however, that the summary expressly stated that it should not be relied upon by third parties. (The Standard)
In September 2024, the Gambling Commission charged Sorare with providing facilities for gambling without holding an operating licence, contrary to the Gambling Act 2005. Those allegations have not been determined: Sorare contests the charges and the trial has been postponed until 7 June 2027. (Gambling Commission)
Following notification of the charges, the Premier League began ring-fencing payments received from Sorare and subsequently made an authorised disclosure to the UK Financial Intelligence Unit. Counsel for the NCA told the Court that the Premier League “did the right things” by ring-fencing the funds and making a suspicious activity report. (Sky News)
Nevertheless, £10,024,041.33 plus accrued interest held in a Premier League bank account is currently subject to a freezing order. On 11 September 2026, Westminster Magistrates’ Court granted a further four-month extension to that order while the relevant investigation continues. (Courts and Tribunals Judiciary)
What does an account freezing order mean?
Account freezing orders form part of the civil recovery regime under the Proceeds of Crime Act 2002 (POCA).
They allow law enforcement to apply to freeze funds where the statutory test is met. Broadly, the regime applies where there are reasonable grounds for suspecting that money held in an account is recoverable property. In other words, property obtained through unlawful conduct – or is intended for use in unlawful conduct. An order may prevent withdrawals or payments while investigations continue. (Legislation.gov.uk)
Importantly, an account freezing order is not a finding that the account holder has committed a criminal offence, nor is it itself a forfeiture of the funds.
That distinction is particularly important in this case. District Judge Sam Goozee found no suggestion that the Premier League itself had engaged in unlawful conduct and noted that it had expected Sorare to comply with applicable law under the licence agreement. The Court nevertheless considered the continued freezing of the funds necessary and proportionate while the authorities investigate. (Sky News)
The decision therefore illustrates a potentially uncomfortable reality for sports rights-holders: money received under an apparently valid commercial agreement can become unavailable because of concerns relating to the source of those funds or the activities of the contractual counterparty.
Due diligence: whose legal advice are you relying on?
The case also raises wider questions about how sports organisations conduct due diligence on partners operating in emerging or heavily regulated sectors.
The Premier League knew that the Gambling Commission was considering Sorare’s regulatory status and, according to the Court proceedings, sought further information from the company. It received a summary of Sorare’s legal advice, which concluded that Sorare considered its contests not to constitute gambling.
The difficulty was that the advice had been commissioned for Sorare and expressly stated that it could not be relied upon by a third party. (The Standard)
There is an important distinction between understanding a prospective partner’s legal position and independently verifying it.
That distinction may be particularly relevant where a commercial partner operates at the boundaries between gaming, gambling, cryptoassets, digital collectibles and financial services. The regulatory characterisation of a product may be uncertain, may differ between jurisdictions and may change during the life of a multi-year commercial agreement.
Rights-holders should therefore consider whether enhanced due diligence is appropriate where a partner’s ability to generate revenue depends upon a particular regulatory analysis.
That may involve obtaining independent advice rather than relying solely on the counterparty’s assessment; understanding existing regulatory enquiries even where no enforcement action has yet been taken; and identifying which licences or authorisations underpin the counterparty’s business model.
The contractual protections
Due diligence at the outset is only part of the answer. A commercial partner’s regulatory position can change substantially during a long-term sponsorship or licensing arrangement.
Sports organisations should therefore consider whether their agreements provide sufficient protection if that happens.
Traditional contractual protections may include warranties requiring compliance with applicable laws and possession of all necessary licences. But partnerships involving highly regulated or rapidly developing industries may justify going further.
That can include obligations to notify the rights-holder promptly of regulatory investigations, threatened enforcement or changes to licensing status; information and audit rights; specific termination rights triggered by regulatory events; and provisions governing payments which are challenged, restrained or otherwise become unavailable.
The case also demonstrates that termination is not necessarily the end of the issue. Even where future commercial rights can be brought to an end, payments already received may remain exposed to investigation or recovery processes.
Payment structures and treasury arrangements can therefore form part of the risk analysis as well as conventional contract drafting.
Wider implications for sports partnerships
Sport has been particularly attractive to businesses seeking rapid consumer recognition. Betting operators, crypto businesses, fantasy platforms and other technology companies have all used sponsorship and licensing arrangements with clubs, athletes and competitions to access highly engaged global audiences.
For sports organisations, those industries can offer valuable new sources of commercial revenue. But the association works in both directions.
A major sporting partnership provides the commercial partner with more than intellectual property rights. It can also provide visibility, credibility and access to supporters. That makes the reputational and regulatory profile of the partner a governance issue for the sports organisation itself.
The lesson from the Premier League proceedings is not that sports bodies should avoid innovative or emerging sectors, nor that the Premier League necessarily failed to undertake appropriate diligence. Indeed, the evidence before the Court records steps taken by the league once the regulatory position escalated, including ring-fencing funds and reporting the matter to the authorities. (Sky News)
Rather, the case demonstrates that the risk arising from a commercial partner does not necessarily stop with that partner.
For clubs, leagues and governing bodies, commercial due diligence should therefore consider not only whether a partner is financially capable of paying and contractually obliged to comply with the law, but also whether the rights-holder understands the regulatory assumptions underpinning the partner’s business and the consequences if those assumptions turn out to be wrong.
In an increasingly regulated sports economy, counterparty risk can become rights-holder risk remarkably quickly.
How Mishcon de Reya can help
Mishcon de Reya's Sports law team helps sports organisations mitigate sponsorship and partnership risk through strategic due diligence, robust commercial agreements and advice on regulatory, reputational and financial challenges arising from partner scrutiny.
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