[1] http://www.nytimes.com/2002/07/30/sports/college-football-ol...
Many modern sports contracts have clauses in them that protect the employer if an athlete is injured doing an athletic activity outsider of their normal training. A good example might be a football player blowing out his knee playing pickup basketball. These clauses usually give the team the ability to withhold future salary or even go after previously paid wages. Although these clauses aren't always exercised depending on the player's relationship with the team, the severity of the injury, and the activity that caused the injury. A team doesn't want to risk alienating a player or their fans unless there is a huge gap between the financial impact of the injury and the player's future perceived value.
There are also various sponsorship agreements that players and teams have with companies that have restrictions about supporting a competitor. For example an NBA player sponsored by Nike might not be allowed to wear an Adidas shoe during a game.
Considering these precedents and that Riot appears to act as some combination of a sponsor and team/league that employees these eathletes, I think this decision is pretty reasonable.
Here, for example, is the NBA's take: http://bammgt.com/?page_id=339
My knowledge of professional sports is pretty limited to the US, where there is essentially a monopoly in each sport. Does anyone know about this? I suspect soccer or cricket, both fairly international sports, might have good examples?
One notable example is female basketball players. The two most popular and highest paying leagues are in Russia and in the USA and have seasons that do not overlap. It is pretty common for good players to play in both leagues. As far as I am aware, there is no restriction on this by either league.
Another example would be in football/soccer. Player's who play in the US are often "loaned" to teams in Europe in order for them to continue playing during the duration of the off-season. This allows them to stay in shape, face better competition, and improve their game. The team that receives the player will generally pay the team that loans the player an agreed upon fee in order to compensate them for the risk of injury. If the two teams can't agree on a fee, the player will be prevented from playing for the second team.
Interesting little tidbit: On October 11, 1992, Sanders played in a Falcons game at Miami and then flew to Pittsburgh, hoping to play in the Braves' League Championship Series game against the Pirates that evening and become the first athlete to play in two professional leagues in the same day. Sanders ultimately did not, however, appear in the baseball game that night.
As noted above, there are clauses placed in individual contracts in an attempt to limit injury.
The UCI (pro cycling sanctioning body) also prohibits the top-tier cyclists from racing in events that lack a UCI sanction.
This has been a large problem in US pro-mountain biking, as most long-distance races are not UCI sanctioned. In theory, pro racers wishing to participate in these events risk fines.