I said what I'd do in the next paragraph.
If you're going to turn this into a "real world" example we can do that. I don't know what "lightly" is to you or what regulations you work under, but there are plenty of things you can do. You can suspend, demote, discipline, counsel or even PIP someone. All of these can be done without firing them. However, there are always things that are automatically fireable (Harassment, Violence, Sabotage, putting Dylan Mulvaney on a beer can).
I don't think it's out of line for these kids to sit a year and possibly forfeit their scholly's while they are suspended. This is just an example. There is something between going to bed without dinner and being banned that seems more reasonable to me. I think if you did not place bets on your team then getting "fired" is heavy.