Skillz Wins $420M Fraud Verdict Against Papaya Gaming's Bots

Photo by Picryl, PDM 1.0
Key Takeaways
- A Manhattan jury found Papaya Gaming liable under the Lanham Act, awarding Skillz $420 million in damages.
- Papaya admitted to using bots in games marketed as human-only until November 2023, inflating $4.7 billion in fraudulent winnings.
- Skillz shares surged by more than 200% following the verdict, though investor uncertainty remains over how much the company will recover.
A Manhattan federal jury has ruled in favor of Las Vegas-based mobile gaming company Skillz in its false advertising lawsuit against rival Papaya Gaming. The eight-person jury deliberated for just over two days before finding Papaya liable. The jury found Papaya had violated the Lanham Act and New York business statutes, awarding Skillz $420 million in damages. The jury also recommended disgorgement figures of $719 million and $652 million. Judge Denise Cote will issue a final ruling on disgorgement in early June.
Skillz's Case Against Papaya Gaming's Bot Fraud Explained
At the heart of the case was Papaya's use of automated bots in games marketed as human-only competitions. Skillz hired a third-party research company to test whether Papaya was matching players against bots. Papaya later admitted it had used bots until November 2023.
Skillz also alleged that Papaya advertised paying users $6.7 billion in winnings. Of that total, $4.7 billion went to games where bots won. Skillz argued it had lost business to Papaya because of these false representations. CEO Andrew Paradise described the dispute as a matter of trust. "Papaya conducted a multi-year campaign of fraud and false advertising that materially damaged Skillz and the skill-based gaming industry," the company said in a statement.
Skillz Stock Surges After Landmark $420M Fraud Verdict
Skillz shares surged more than 200% on the New York Stock Exchange following the verdict. Shares jumped as high as 443%, hitting $20, before settling around $11. Before the ruling, Skillz had a market capitalization of roughly $60 million. A $420 million award would represent a significant financial lifeline for the struggling company. Investor reaction remained volatile, reflecting uncertainty over how much money Skillz will ultimately recover.
A federal jury's $420 million fraud verdict against Papaya Gaming signals that misleading players with bots is not just an ethical violation but a legally actionable offense with massive financial consequences.
"We're pleased with the jury's verdict and appreciate the careful consideration of the facts," a Skillz spokesperson said. "We remain committed to fair competition and to providing a trusted, transparent experience for players and developers."
Papaya Plans Appeal as Verdict Sets Gaming Fraud Precedent
Papaya announced plans to appeal and may argue for a mistrial or reduced judgment in post-trial conferences. "While Papaya respects the jury's decision, we are disappointed with the outcome. We look forward to court review of the verdict," a Papaya spokesperson said.
During closing arguments, Papaya argued there was no evidence it earned a single dollar from the disputed portion of winnings. The case follows Skillz's earlier legal victory against AviaGames, which settled for $80 million after similar allegations of bot use. The verdict sets a notable precedent, showing that rival companies, not only players, can successfully claim harm when fairness assurances prove false.
Lucas Michael Dunn is a prolific iGaming content writer with 8+ years of experience dissecting it all, from game and casino reviews to industry news, blogs, and guides. A psychology graduate and painter that transitioned into the iGaming world, his articles depend on proven data and tested insights to educate readers on the best gambling approaches. Beyond iGaming content craftsmanship, Lucas is an avid advocate for responsible play, focusing on empowering players to strike a balance between thrill and informed choices.
Stay updated with the latest in Casinos, Gambling & Gaming
Follow Casino.com for breaking news, features, expert guides, responsible gambling advice, legal updates & financial insights.
Related News

Canadian Tourist Guilty in Las Vegas Flamingo Cruelty Case
Mitchell Fairbarn, 34, was convicted of animal cruelty after taking Peachy the flamingo from the Flamingo Las Vegas habitat. Sentencing is December 1.

The Venetian Brings Slide Dealing to the Las Vegas Strip
The Venetian is the first Strip poker room to slide cards instead of pitching them, starting at its WPT Fall Festival with nearly $4M in guarantees.

SAHARA Las Vegas Now Accepts Crypto at Its Casino Cage
SAHARA Las Vegas is the first Strip casino to accept Bitcoin, Ethereum, and Litecoin for casino play, with deposits converted to chips in U.S. dollars.

Metallica Sphere Residency Revives Rare Songs in Las Vegas
Six shows into its 24-show Sphere residency, Metallica has brought back songs unplayed for years and rotated fresh picks into its weekend sets.

Metallica Returns to Sphere for Weekend Three in Las Vegas
Metallica plays sold-out Sphere shows October 15 and 17, while Las Vegas Takeover fan events bring a Venetian pop-up, cigar happy hours, and a blood drive.

Metallica Returns to Sphere for Second Las Vegas Weekend
Metallica plays Sphere on Oct. 8 and 10 with all-new setlists under its No Repeat Weekend format. Both shows are sold out, with 24 dates through March 2027.

Nevada Casinos Win $1.27B in August, but Tax Fees Drop
Nevada's statewide gaming win rose 3.14% to $1.27 billion in August, yet September percentage fee collections fell 5.98% as Las Vegas visitation slipped.

Casino CEOs, Nevada Say Prediction Markets Are Sportsbooks
At G2E, MGM and Caesars CEOs joined Nevada regulators in saying prediction markets are sportsbooks that need state licenses, as the legal fight heats up.

G2E 2026: Casino CEOs Weigh Vegas Pricing, Deals and Asia
Caesars, MGM and Wynn CEOs took the G2E 2026 stage to address Las Vegas pricing, visitation trends, major takeover deals and MGM's $10 billion Osaka resort.

Casinos, Unions and Tribes Unite Against Prediction Markets at G2E
Casino operators, UNITE HERE and tribal leaders present a joint front against prediction markets at G2E 2026 as Congress weighs a federal crackdown.

John Mayer Sphere Residency Set as Wizard of Oz Tops $500M
John Mayer will play six nights at the Las Vegas Sphere in April 2027, just days after The Wizard of Oz at Sphere passed $500 million in ticket sales.

MGM, Caesars and Wynn CEOs Join Wayne Gretzky at G2E 2026
MGM, Caesars and Wynn CEOs share the G2E 2026 Main Stage with Wayne Gretzky Sept. 29, while a new tech zone spotlights AI, payments and cybersecurity.

Zoox Robotaxi Crash on Las Vegas Strip Hospitalizes Driver
A Nissan Murano driver suffered minor injuries after a crash with a Zoox robotaxi on Las Vegas Boulevard, closing four lanes near Four Seasons Drive.

Wynn Resorts Closes $900M Note Offering to Refinance Debt
Wynn Resorts has closed a $900 million offering of 6.875% senior notes due 2035, using the proceeds to retire Wynn Las Vegas notes maturing in 2027.

Trump Sold Caesars Stake as Fertitta's $17.6B Deal Closed
Trump's advisors sold a small Caesars stake on July 29, a filing shows, as Tilman Fertitta closed his $17.6 billion buyout of the casino giant.

Vegas 5-Day Sale Returns With 180+ Deals After Tough 2025
Las Vegas tourism is showing signs of stabilizing, and the LVCVA's Vegas 5-Day Sale offers 180+ deals on hotels, dining and shows through Sept. 26.

50 Cent Unveils Head Crack Dice Game Ahead of G2E Debut
Curtis "50 Cent" Jackson is entering casino gaming with Head Crack, a three-dice game set to debut at G2E 2026 at The Venetian Expo on Sept. 29.

Sphere Las Vegas Partners With Lyft for Rideshare Access
Sphere and Lyft have signed a multi-year deal naming Lyft the venue's official rideshare partner, adding a dedicated pickup zone and in-app wayfinding for guests.

Titus' Gambling Tax Deduction Fix Clears House Panel
The House Ways and Means Committee approved a bill to keep the gambling loss deduction at 100%, blocking a planned cut to 90% in 2027.

Nevada Coalition Pushes First Cigarette Tax Hike Since 2015
A Nevada health coalition wants to raise cigarette taxes to $3.55 a pack, the state's first hike in over a decade, to fund cessation programs.

Silver: NBA Weighs Sphere-Style Arena for Las Vegas Team
NBA Commissioner Adam Silver revealed the league is considering a Sphere-inspired arena as it nears a decision on Las Vegas expansion.

MGM Buyout Deal in Doubt as Las Vegas Recovery Slows
JPMorgan's Daniel Politzer questions MGM's $18B Diller buyout as Las Vegas slows, warning shares could fall toward $35 if the deal collapses.

Station Casinos Surprises Staff With $70M Stock Award
Station Casinos celebrated its 50th anniversary by awarding nearly 10,000 team members $70 million in Red Rock Resorts stock.

Universal Entertainment Forms Nevada Gaming Unit
Universal Entertainment has created Nevada-based UDN Gaming to pursue US gaming licenses, marking its return to overseas gaming equipment sales.

Oprah Winfrey Brings New Immersive Show 'AHA' to Sphere
Oprah Winfrey stars in AHA, a one-weekend-only immersive show at Las Vegas Sphere featuring music, poetry, and art this April 2027.

Tennessee Woman Sues MGM Grand Over Alleged Spa Assault
A Tennessee woman claims a massage therapist sexually assaulted her at MGM Grand Spa, prompting a lawsuit against MGM Resorts.

Roy Student, Casino Tech Pioneer and GSI Founder, Dies at 83
Roy Student, a casino technology pioneer who shaped player-rating and server-based slot systems, died September 5 at 83.

Las Vegas Invests $1.45M to Attract Australian Visitors
LVCVA approved a $1.45M deal with GTI Tourism to market Las Vegas in Australia ahead of Qantas' new nonstop Sydney flight.

Supreme Court Forces Red Rock to Bargain With Union
The Supreme Court rejected Red Rock Casino's emergency stay bid, forcing it to bargain with the Culinary Union immediately.

Florida Man Sues Wynn Las Vegas Over Legionnaires' Case
A Florida man claims he contracted Legionnaires' disease during a January stay at Wynn Las Vegas and is now suing for damages.

T-Mobile Arena's Toshiba Plaza Renamed Paramount+ Plaza
T-Mobile Arena's outdoor plaza has a new name: Paramount+ Plaza. The rebrand debuts during Garcia vs Benn fight week in Las Vegas.

Kirk Cousins Named Raiders Starting QB, Not Mendoza
Raiders coach Klint Kubiak picked veteran Kirk Cousins over rookie Fernando Mendoza to start Week 1 despite a shaky preseason.

Global Gaming Expo 2026 Hits Las Vegas Strip Sept. 28-Oct. 1
G2E 2026 hits The Venetian Expo Sept. 28-Oct. 1 with 25,000+ pros, 400+ exhibitors, and Global Gaming Women's milestone 10th anniversary lineup.

