Paul Gascoigne is reportedly under investigation over an alleged "hate crime" involving a black security guard.
The former England international made the comments during a show billed as An Evening With Paul Gascoigne at Wolverhampton's Civic Hall last month.
Addressing a black security guard who was standing against a black background, the 48-year-old is reported to have said: "If you weren't smiling, I wouldn't be able to see you."
A spokesman for the West Midlands Police confirmed that they had received a report of a hate crime, adding: "Officers have taken an official statement from the victim and the inquiry is ongoing.
"Police take reports of hate crime extremely seriously and a thorough investigation will take place. Anyone who is a victim of this type of offence should not have to suffer in silence and is encouraged to report it to police on 101 or via the internet at www.report-it.org.uk."
A friend of Gascoigne told the Sunday Mercury that he had yet to be interviewed by police but was "terribly upset" by the allegation.
"There is not a racist bone in his body," the source said. "He made a joke of the type he makes all the time to his friend Ian Wright and, unfortunately, it did not go down well. He was naive, but it was said with absolutely no malice.
"For the record, the security guard in question posed, smiling, with his arm around Paul afterwards."
Gascoigne, who has battled alcoholism and depression in the past, was recently fined and issued with a restraining order after pleading guilty to harassing an ex-girlfriend.