Skillz Wins $420M Jury Award Against Papaya Gaming In False Advertising Case

Skillz Inc. has won a $420 million jury award against Papaya Gaming after a federal case over false advertising, bots, and real money skill games.

Good to Know

• A jury awarded Skillz $420 million in damages against Papaya Gaming on April 23.
• The case centered on claims that Papaya told users they played against real people while often matching them with bots.
• The award is the largest in U.S. history under the Lanham Act, according to the announcement.

Skillz Case Puts Bot Claims At Center Of Real Money Gaming Fight

Skillz CEO and founder Andrew Paradise said the verdict backed up claims he had made for years about rival platforms in the skill gaming market.

“I was relieved because I’ve been telling people this and crusading for this,” said Skillz CEO and founder Andrew Paradise, as reported by the Las Vegas Review-Journal. “To be quite frank, people thought it was kind of crazy.”

Skillz filed the case in March 2024 in the United States District Court for the Southern District of New York. The company accused Papaya Gaming of false advertising by telling users they were competing against real players when, according to court findings, they were often matched against bots. The court also found that Papaya engaged in $4.7 billion worth of fraudulent activity.

Papaya Gaming, founded in Israel in 2016, offers real money skill games such as Solitaire Cash, Bingo Cash, and Bubble Cash. Skillz, founded in 2012, runs a platform where users can pay entry fees, usually under $3, to compete in skill-based games for cash prizes.

The dispute also showed how hard competition hit Skillz. The Las Vegas company holds more than 80 patents linked to its platform and ranked No. 1 on the Inc. 5000 in 2017. However, Paradise said Papaya and other rivals changed the market quickly.

“They were making five times as much money as us in the first seven days,” said Paradise. “It was literally a clone of our product … we couldn’t figure it out.”

Skillz executives said they learned more about alleged bot use during the Game Developers Conference in San Francisco in 2023. Chief Strategy Officer Casey Chafkin identified gaps in how competing platforms described player matchups, according to court testimony.

“What they’re doing is they’re telling you that you’re playing real people, when you’re actually playing the house,” said Paradise. “It’s worse than gambling. It’s rigged gambling.”

The $420 million award may not be the final financial outcome. The court could still order Papaya to pay more, including up to $719 million through profits-based disgorgement or $652 million through cost-savings-based penalties. Those amounts are alternatives to the jury award, not added on top of it, and a judge could still adjust the final figure.

Skillz also won a separate legal case earlier in 2024, securing a $43 million judgment against AviaGames for patent infringement.

“The concept that Papaya built, it’s built on fraud, it’s built on stealing from people and tricking them,” said Paradise. “It’s destroying the industry I started.”

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