Case Background
Plaintiff Skillz Platform Inc. pioneered a mobile eSports platform that matches live human players in head-to-head, skill-based digital game competitions where participants play for cash prizes. Defendants Papaya Gaming, Ltd. and Papaya Gaming, Inc. capitalized on this success by launching similar competing mobile games, including Solitaire Cash, 21 Cash, Bingo Cash, and Bubble Cash. Papaya heavily marketed its applications to the public, website visitors, and app store users as "totally fair and skill-based" platforms where winners are determined solely by objective skill criteria. However, Skillz discovered that Papaya did not run entirely human-to-human tournaments. Instead, Papaya secretly filled its player pools with pre-programmed computer algorithms and artificial bots that masqueraded as real human competitors. Papaya deployed these automated bots to artificially accelerate tournament matching times, maintain high player liquidity, and manipulate game outcomes. By secretly utilizing bots where real user funds were at stake, Papaya functioned like a casino house, controlling bot win-and-loss frequencies to maximize company revenues while capturing the entry fees of defeated human participants. The deceptive promotional tactics and systemic use of hidden bots directly injured Skillz Platform Inc. Because potential and existing gamers believed they were competing exclusively against real people of equivalent skill on Papaya platforms, a substantial segment of the active player base migrated away from Skillz over to Papaya's applications. This artificial inflation of player liquidity allowed Papaya to siphoning off critical user traffic from the market. Consequently, Skillz suffered severe financial and operational harm, including a direct loss of customer base, decreased market share, and diminished corporate revenues and profits.
Cause
The legal dispute arose because Papaya secretly integrated pre-programmed computer bots into its real-money gaming tournaments while publicly advertising that the platform was entirely skill-based and fair. This hidden use of algorithmic players allowed Papaya to control win-and-loss metrics, operate like an unregulated casino house, and capture cash entry fees from unsuspecting users under the false pretense of human-to-human gameplay.
Injury
The deceptive advertising and bot implementation directly harmed Skillz by diverting its active player base over to Papaya's applications. Because gamers believed they were participating in fair matching pools, Papaya artificially inflated its market liquidity, siphoned critical user traffic, and caused Skillz to suffer a direct loss of customers, diminished market share, and a severe drop in corporate revenues.
Damages Sought
Skillz sought actual, compensatory, and consequential damages to remedy its severe operational and financial losses. Additionally, the Plaintiff pursued the complete disgorgement of all revenues and ill-gotten profits accumulated by Papaya, alongside punitive damages and permanent injunctive relief to halt the false marketing and bot deployments.
Key Arguments and Proceedings
Legal Representation
Plaintiff(s): Skillz Platform Inc.
· Counsel for Plaintiff(s): Amy Katherine Nemetz | Barry Antoine Kamar | Curtis Ryan Crooke | Kathleen Elizabeth McCarthy | Lazar Pol Raynal | Michael Anthony Lombardo | Craig Carpenito
Defendant(s): Papaya Gaming, Ltd. and Papaya Gaming, Inc.
· Counsel for Defendant(s): Anthony Joseph Dreyer | Devora Whitman Allon | Adam R. Alper | Allison M. Brown | Argie Lagrimas Mina | Cole Carter | Danielle Renee Sassoon | George W. Hicks, Jr. | Giancarlo Francis Carozza | Michael W De Vries | Quinn Zhang | Sharre Lotfollahi
Key Arguments or Remarks by Counsel
Claims
Counsel for Skillz asserted that Papaya executed an extensive consumer fraud scheme that systematically violated the false advertising provisions of the federal Lanham Act. The Plaintiff presented evidence showing that Papaya's explicit public representations regarding absolute fairness, skill-based peer-to-peer matching, and human-only competition were completely fabricated. Furthermore, Skillz highlighted that Papaya openly prohibited users from using automated systems while secretly employing house-controlled bots to drain consumer funds.
Violations of New York General Business Law
The Plaintiff also argued that the surreptitious operation of bots constituted a flagrant deceptive business practice under Section 349 of the New York General Business Law. Skillz emphasized that because Papaya users risked real money on digital events controlled by hidden algorithms rather than true human skill, the Defendants actively maintained an illegal, unregulated gambling platform masked as an app-store-compliant game.
Defense
Papaya denied all allegations of wrongdoing raised in the complaint, challenging the characterizations of its matching infrastructure and disputing the claims of false advertising and consumer deception.
Jury Verdict
Following a full trial in the United States District Court for the Southern District of New York, the jury returned a complete verdict in favor of the Plaintiff, Skillz Platform Inc., finding the Defendants liable on all counts.
Lanham Act False Advertising
The jury decided that Skillz established by a preponderance of the evidence that Papaya engaged in explicit false advertising in violation of the federal Lanham Act.
New York General Business Law Deception
The jury found that Skillz successfully proved that Papaya committed deceptive business acts and practices in direct violation of New York General Business Law Section 349.
Financial Awards and Recovery
After establishing total liability, the jury ruled that Skillz was fully entitled to monetary damages and ordered a massive financial recovery consisting of three distinct segments.
Compensatory Damages
The jury awarded Skillz Platform Inc. a total of $420 million in direct compensatory damages.
Disgorgement of Profits
The jury determined that Skillz was entitled to an award of Papaya's additional profits and ordered the Defendants to pay $719 million.
Cost Savings Award
The jury further concluded that Skillz was entitled to recover the operational cost savings that Papaya secured through its illicit infrastructure, resulting in an additional award of $652 million.
The foreperson signed and finalized the special verdict form on April 23, 2026, officially closing the jury deliberations.
Court documents are available upon request at [email protected]
