Skillz Secures $420 Million Jury Verdict Over Papaya Gaming’s False Advertising

(AsiaGameHub) –   Skillz Inc. secured a $420 million jury verdict against Papaya Gaming following a federal lawsuit involving allegations of false advertising, the use of bots, and real-money skill-based competitions.

Good to Know

• On April 23, a jury granted Skillz $420 million in damages in its case against Papaya Gaming.
• The lawsuit focused on allegations that Papaya misled users into believing they were facing human opponents, while frequently pairing them with automated bots.
• According to the company’s statement, this verdict marks the largest award ever issued under the Lanham Act in U.S. history.

Skillz Lawsuit Highlights Bot Allegations in Battle Over Real Money Gaming

Andrew Paradise, the CEO and founder of Skillz, stated that the decision validates the assertions he has long made regarding competing platforms within the skill gaming sector.

“I felt relieved because I have been raising awareness about this issue for years,” remarked Skillz CEO and founder Andrew Paradise, speaking to the Las Vegas Review-Journal. “Honestly, many people thought I was being a bit extreme.”

Skillz initiated the lawsuit in March 2024 within the United States District Court for the Southern District of New York. The firm alleged that Papaya Gaming engaged in deceptive advertising by assuring users they were playing against actual humans, whereas court documents revealed they were frequently pitted against bots. Additionally, the court determined that Papaya participated in fraudulent activity totaling $4.7 billion.

Established in Israel in 2016, Papaya Gaming provides real money skill games including Solitaire Cash, Bingo Cash, and Bubble Cash. Meanwhile, Skillz, launched in 2012, operates a system allowing users to pay entry fees—typically less than $3—to participate in skill-based contests for monetary rewards.

The legal conflict also highlighted the intense competitive pressure Skillz faced. The Las Vegas-based entity possesses over 80 patents related to its technology and achieved the top spot on the Inc. 5000 list in 2017. Nevertheless, Paradise noted that Papaya and other competitors rapidly altered the market landscape.

“They were generating five times our revenue within the first week,” Paradise stated. “It was essentially a direct copy of our product … we couldn’t understand how they were doing it.”

Skillz leadership reportedly gained further insight into the purported use of bots during the 2023 Game Developers Conference in San Francisco. According to testimony, Chief Strategy Officer Casey Chafkin noticed discrepancies in how rival platforms characterized player match-ups.

“Their practice involves telling users they are competing against real people, when in reality, they are playing against the house,” Paradise explained. “This is more severe than standard gambling. It is gambling that is rigged.”

The $420 million judgment might not represent the ultimate financial resolution. The court retains the authority to mandate additional payments from Papaya, potentially reaching $719 million via profit disgorgement or $652 million through cost-savings penalties. These figures serve as potential substitutes for the jury’s award rather than additions to it, and a judge may still modify the final total.

Earlier in 2024, Skillz achieved victory in another legal dispute, obtaining a $43 million judgment against AviaGames for the infringement of patents.

“The business model Papaya constructed is founded on deceit, theft, and manipulation of users,” Paradise asserted. “It is ruining the industry I helped create.”