The Alliance of American Football League may have shut their doors for good last spring, but the sports betting technology created for games will live on in a deal with MGM Resorts.
As the AAF goes through Chapter 7 bankruptcy, the league’s proprietary betting technology has been the main topic of interest as the proceedings continue in court.
Before the league began, leaders of the AAF developed a cutting-edge real-time collection of data that could be used for in-game sports betting.
Believing that sports betting was on the verge of flourishing after the Supreme Court’s decision last year, the AAF spent millions of dollars developing this sought-after technology.
The data collection program was developed with an investment from MGM Resorts, and the gaming company had angled to acquire the technology through their claims.
In addition to their technology, the company is also asking for another $5 million dollars to satisfy their initial investment in the league.
The two parties agreed to allow MGM to acquire the sports betting technology for $125,000 plus a reduction in their claim from $7 million to $5 million.
The trustee overseeing the bankruptcy case, Randolph Osherow, submitted the settlement paperwork to the court on Wednesday.
The agreement has to be approved by the bankruptcy judge in charge of the case before the two sides can exchange the assets.
Also, there will be a period where other claims to assets from the AAF will be awarded.
The football league did not finish their first season of operation, leaving investors and franchise owners holding the bag on millions in liabilities.
MGM was one of the first investors in the league, spending close to $7 million as the league gathered money from outside parties to finance the league’s operations.
Once the league disbanded, MGM immediately entered into negotiations to take ownership of the technology before other gaming companies could attempt to acquire the collection tool.
The technology fostered by the MGM/AAF partnership offered real-time player tracking via the league’s official mobile application.
Although the league and MGM never progressed the technology to the betting world, the belief from the gaming company is that the program could be licensed to other sports leagues.
Developers hoped to further the technology throughout the AAF’s first season by adding a predictive component that would allow bettors to place wagers on the data in real-time.
For MGM, the hope was that the technology could be used by integrating the broadcast of the games with an app that would offer hundreds of betting possibilities.
The AAF believed that the technology could gather more interest in their league and create a new style of immediate in-game wagering that other leagues could not offer.
The settlement with MGM clarifies a legal situation that was becoming more clouded as reports suggested that majority investor in the AAF, Tom Dundon, was attempting to claim the technology.
Dundon filed a claim as a creditor this week, seeking reimbursement of his $70 million investment.
Once they take ownership, MGM will continue to develop the technology hoping to use it in a partnership with one of the big four sports leagues in America.
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