On July 28, a federal judge in New York ordered Papaya Gaming to pay $719 million to Skillz as a disgorgement award. The court entered the sum in place of the jury’s $420 million in actual damages, not on top of it, and Papaya said it was disappointed and would pursue available options, including appeal.
Judge Denise Cote said the figure reflected Papaya’s unjust enrichment from false advertising. She treated $719 million as the highest option among the sums the jury had put before her, with a $652 million alternative tied to estimated customer-acquisition costs Papaya saved by using bots.
The case began with a 2024 lawsuit under the federal Lanham Act and New York General Business Law. In April, a New York jury found Papaya’s advertising false and awarded $420 million in actual damages, a sum described as the largest false-advertising verdict in U.S. history under the Lanham Act.
The ruling said Papaya’s founders moved into the RMSB market in 2019 by deceiving the public about what the product was. Rather than tournaments in which paid entrants played other humans, the company ran contests in which multiple participants were bots, and the judge wrote that those bots were essentially scores generated by Papaya’s algorithms rather than artificial intelligence players.
The court drew a line between randomized bots used to fill out tournaments and “tailored bots” designed to give a player a guaranteed win or to keep a losing player engaged, or to reclaim money from a winning player. It also said Papaya ended the practice in December 2023 and that there was ample factual information that the company used bots while telling users it was not doing so.
The court also awarded about $10 million in attorney’s fees for 2024 and 2025, plus litigation costs tied to Papaya executives’ invocation of the Fifth Amendment during discovery. Skillz said it would pursue full collection of the judgment, although appeal and further proceedings leave the timing and ultimate recovery uncertain.
Andrew Paradise, Skillz’s chief executive, said the company was built on “honor” and accused Papaya of using bots to fake the competition. GamingAmerica also noted that Skillz’s stock had fallen more than 99% from an initial 2021 debut above $280, then nearly quadrupled from an early-year low while remaining below $10, with a market value of about $150 million.
A separate opinion on Skillz’s request for injunctive relief is still to come.
