Skillz Awarded $719 Million in False Advertising Judgment Against Papaya

It was a rotten day for Papaya.

The Israel-based skill-gaming operator was hit with a $719 million judgment after a federal judge in Manhattan adopted a profits-based remedy in the company's false advertising battle with rival Skillz.

A federal jury found Papaya liable on April 23 for false advertising and deceptive business practices under the federal Lanham Act and New York law. The case came down to one thing: Papaya used bots in cash games it sold as fair contests between real people.

Here is how it worked: Players paid entry fees, played games on their phones, and won cash based on their scores. Papaya's ads said or suggested that you were up against other people at your skill level, and that the company had no stake in who won.

But Papaya was dropping bots into its tournaments, profiles with usernames and scores the software picked in advance.

When a bot won, the prize money did not go to a person. Evidence in the case showed more than 13 million bot participants on the platform during the period at issue, against roughly 11 million real players. Even so, Papaya kept telling customers the games were fair, and when they asked whether they were playing against computers, the company said no. Papaya used bots from 2019 until at least November 2023, according to court documents.

Jury verdict

Skillz sued in March 2024. The jury awarded it $420 million in actual damages and gave the judge two ways to measure the money Papaya made off the scheme: $719 million based on the extra profit Papaya took in, or about $652 million based on what it saved.

On Monday, U.S. District Judge Denise L. Cote turned down Papaya's attempts to undo the verdict and went with the $719 million. That figure replaces the $420 million rather than stacking on top of it, because Skillz can only collect once for the same harm. Cote also gave Skillz about $10 million in legal fees for 2024 and 2025, plus some other costs. A separate ruling on whether to issue an injunction is still coming.

The $719 million is not a government fine. It is a civil judgment that goes to Skillz Platform, and its lawyers call it the largest false advertising award in the country's history. Skillz now operates under the name Firy and trades on the New York Stock Exchange as FIRY, with Skillz Platform as the subsidiary that brought the case.

Firy called the decision a vindication.

"We founded this industry and built its biggest and best company on one value above all others: honor," said Andrew Paradise, Firy's founder and CEO. "When growth stalled, investors decided our moat was a story. It was not. In a winner-take-most market, Papaya could not beat us fairly, so it used bots to fake the competition we invented. This judgment sets the record straight. The moat was real. Fourteen years in, on our path to one hundred, Skillz is back to defining what this industry was built for: fair, fun, and meaningful competition."

Papaya says it plans to appeal, per reports. Firy says it will try to collect the full amount but warned there is no guarantee of when, or how much, it ends up with, given the likely appeal and more court fights ahead.