{"id":112861,"date":"2019-08-21T18:02:24","date_gmt":"2019-08-22T01:02:24","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=112861"},"modified":"2019-08-21T18:31:04","modified_gmt":"2019-08-22T01:31:04","slug":"mgm-buys-aaf-sports-betting-app-in-court-approved-sale","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/mgm-buys-aaf-sports-betting-app-in-court-approved-sale\/","title":{"rendered":"MGM Resorts International Buys Bankrupt AAF Sports Betting App in Court-Approved Sale"},"content":{"rendered":"

A judge earlier this week approved the sale of a now-defunct professional football league\u2019s sports betting application to MGM Resorts International.<\/p>\n

\"\"
The Alliance of American Football may not have lasted long, but MGM Resorts International hopes the technology will. A US Bankruptcy Court judge approved the sale of the league’s app to MGM, which invested in its development. (Image: Trent Nelson\/The Salt Lake Tribune)<\/figcaption><\/figure>\n

On Monday, US Bankruptcy Judge Craig A. Gargotta in Texas ruled in favor of the Las Vegas gaming company\u2019s acquisition of intellectual property (IP) owned by Legendary Field Exhibitions LLC, the New York-based owner of the Alliance of American Football (AAF).<\/p>\n

As part of the agreement, which was filed nearly two months ago, MGM agreed to pay $125,000 to the debtors for the property.<\/p>\n

The AAF kicked off its inaugural season in February, the weekend after the NFL\u2019s Super Bowl, to some acclaim. However, the young league quickly hemorrhaged money. Just nine days after its first games, Tom Dundon, owner of the National Hockey League\u2019s Carolina Hurricanes, agreed to invest up to $250 million into the league for a majority stake in it.<\/p>\n

On April 2, with just two weeks left in the regular season, AAF officials suspended operations<\/a>. The day before, according to court documents, the league and MGM entered into an agreement granting MGM \u201ca perpetual, irrevocable, and fully paid-up license\u201d for the IP.<\/p>\n

While the AAF\u2019s trustee said he knew other creditors would claim ownership of the intellectual property, he urged Gargotta to approve the sale for several reasons, which included that any court case over the IP would take time and money.<\/p>\n

Approval of the Settlement Agreement is expected to expedite the liquidation of one of the Debtor\u2019s assets, avoid disputes, and maximize estate recoveries under the circumstances,\u201d the agreement stated.<\/p><\/blockquote>\n

In addition to the payment, MGM further agreed to reduce its claim against the bankrupt league from $7 million to $5 million.<\/p>\n

More Work Needed on App<\/h2>\n

According to a statement made to the court by Scott Butera, MGM\u2019s president of interactive gaming, MGM loaned the start-up league $7 million for IP development. The property was a mobile application that would, once finished, offer in-game betting options and provide bettors \u201cbiomechanical data\u201d they could consider when making wagers.<\/p>\n

That data would be transmitted in less than a half-second.<\/p>\n

As of April, when the AAF filed for liquidation, the app was not operational, according to Butera\u2019s statement<\/p>\n

\n

In order for the app to become operational, Butera said MGM expects it will need to invest millions of dollars into the project. Then, once operational, Butera added that the technology will need league partners to generate revenue, and that the company would need to market the technology in order to acquire enough users to make a profit.<\/p>\n<\/div>\n

Currently, MGM serves as a betting partner for Major League Baseball<\/a>, the National Basketball Association<\/a>, and the National Hockey League (NHL<\/a>).<\/p>\n

Other companies are working on similar applications, and Butera admitted that he was uncertain if MGM could make the AAF\u2019s app competitive.<\/p>\n

However, \u201cif the IP is not developed going forward, its value will diminish, and it may become obsolete and unusable,\u201d he concluded in his statement.<\/p>\n

An MGM spokesperson told Casino.org<\/em> the company would not comment Wednesday on the acquisition.<\/p>\n

Former Players Objected<\/h2>\n

On Friday, a lawyer for Colton Schmidt and Reggie Northrup, both of whom played in the AAF, filed an objection to the admissibility of Butera\u2019s statement in advance of Monday\u2019s hearing over the sale.<\/p>\n

The players\u2019 objected primarily because they believe the IP was the league\u2019s only \u201casset of value\u201d in liquidation, and the $125,000 sale price was harmful because they \u201csubjected themselves to serious risk of physical harm\u201d in playing for the league.<\/p>\n

The players also argued that MGM believes the IP to be worth far more than what they offered, noting a USA Today article that quoted league co-founder Charlie Ebersole saying the AAF planned to spend at least $500 million over a five-year period to develop it.<\/p>\n","protected":false},"excerpt":{"rendered":"

A judge earlier this week approved the sale of a now-defunct professional football league\u2019s sports betting application to MGM Resorts International. On Monday, US Bankruptcy Judge Craig A. Gargotta in Texas ruled in favor of the Las Vegas gaming company\u2019s acquisition of intellectual property (IP) owned by Legendary Field Exhibitions LLC, the New York-based owner […]<\/p>\n","protected":false},"author":45,"featured_media":112862,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[60,16,1074,16693],"tags":[],"acf":[],"yoast_head":"\nMGM Buys AAF Sports Betting App in Court-Approved Sale<\/title>\n<meta name=\"description\" content=\"MGM Resorts International will continue to develop the AAF application and market it to other professional sports leagues, according to court documents.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/mgm-buys-aaf-sports-betting-app-in-court-approved-sale\/\" \/>\n<meta property=\"og:locale\" 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