Las Vegas, April 24, 2026, 04:56 (PDT)
Skillz Inc. shares faced fresh volatility on Friday after a Manhattan federal jury ordered mobile-gaming rival Papaya Gaming Ltd. to pay $420 million in damages in a false-advertising case, a verdict that turned a thinly traded gaming stock into one of the market’s sharpest movers. Bloomberg Law reported that the jury found Papaya liable on Thursday and that a judge plans to rule in early June on a separate disgorgement issue, a remedy that can force a defendant to give up profits or savings tied to alleged misconduct.
The verdict matters now because investors have to value two things at once: a potentially large legal recovery and a still loss-making operating business. Skillz jumped 238.32% to $12.45 on Thursday, then fell 25.14% to $9.20 in pre-market trading on Friday, Benzinga reported.
The case centered on whether Papaya misled users and the market by describing games as fair and skill-based while allegedly using bots, or automated non-human players, in some tournaments. A prior court order said Skillz claimed Papaya’s advertising implied users were competing against people, while Papaya employed bots against human players.
Skillz kept its public statement brief. “We’re pleased with the jury’s verdict,” the company said, adding that it remained committed to “fair competition” and a “trusted, transparent experience” for players and developers. Skillz Investors
Chief Executive Andrew Paradise went further in an interview with GamesBeat, saying, “On behalf of the shareholders, I’m so relieved,” and later calling the outcome “pretty vindicating.” GamesBeat also reported that the jury gave advisory disgorgement figures of $719 million and $652 million, with Judge Denise Cote to decide what remedy applies. GamesBeat
Papaya said it respected the jury’s decision but was disappointed and expected court review of the verdict, according to GamesBeat. During closing arguments, Papaya said there was no evidence it earned “a single dollar” from the disputed portion of winnings and said its own total revenue was below $1 billion, Investing.com reported. Investing.com UK
The ruling adds another fight to a narrow but fierce corner of mobile gaming: real-money skill-based games, where users pay to enter contests and compete for cash prizes. Skillz previously settled a patent lawsuit with AviaGames after a jury awarded it nearly $42.9 million, and Reuters reported in 2024 that AviaGames was also facing separate allegations over bots, which AviaGames denied.
Skillz’s business backdrop is less dramatic than the court result. The company reported 2025 revenue of $104.5 million, a net loss of $70.4 million, cash and cash equivalents of $194.5 million, and total outstanding debt of $129.7 million at year-end. Adjusted EBITDA, a non-GAAP profit measure that strips out interest, taxes, depreciation and other items chosen by the company, remained negative at $50.5 million for the year.
The risk is that a verdict is not the same as cash in the bank. The judge still has to settle the disgorgement question, Papaya has signaled it will seek review, and any appeal or collection fight could stretch the timeline; meanwhile, Skillz still has to show that its core platform and RZR ad-tech unit can turn revenue gains into durable profits.
