Photographs in the British media appeared to show Dons midfielder Samir Carruthers urinating into a glass at the race meeting on Tuesday.
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Bristol City have also released a statement as defender Luke Ayling was pictured with Collins and Carruthers, although he is not shown to be involved in the incident.
Carruthers began his career at Aston Villa after joining the club’s youth academy from Arsenal in 2009.
All three clubs said they will investigate the loutish behaviour, and Cheltenham has blocked the party from attending the second day of the festival.
MK Dons midfielder Samir Carruthers told Sky Sports News he had “let the club down massively” and felt “embarrassed”.
Cheltenham Festival cancels booking for footballers over peeing in a glass picturesCarruthers, 22, and Northampton Town’s James Collins, 25, were pictured relieving themselves in front of a packed crowd.
The striker, now on loan at Northampton Town, is one of two footballers alleged to have urinated into a glass before pouring it over a balcony.
Collins’ parent club have also announced plans to investigate the incident.
“We are unable to comment further until this investigation has been completed”.
The festival announced this morning that it had cancelled a company booking for the box.
Carruthers who signed for Villa as a 16-year-old in 2009 was enjoying a private box on the opening day of the historic horse racing event.
Gloucestershire Constabulary said no police action would be taken, although it was a “thoughtless act which is not acceptable”.
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“We will be speaking to the players concerned and will take appropriate action where necessary”.
