Antitrust Law Daily Wrap Up, ADVERTISING—S.D.N.Y.: Papaya's post-trial motions denied, Skillz awarded $719 million in online gaming bot Lanham Act case, (Jul 29, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Papaya's counsel apologized to jury during summation, telling the jury that "Papaya has taken responsibility for its actions. It stopped giving those customer complaint responses. It stopped using bots."

The federal district court judge in New York City has ruled on the post-trial motions by Papaya and by Skillz in the false advertising case brought by Skillz alleging Papaya deceived consumers by implying that fellow competitors will be human players when it deployed bots to compete against the human players. Papaya’s attempts to overturn the verdict were rejected and Skillz was awarded $719 million plus its attorney fees for the years 2024 and 2025 and certain costs. Papaya's motions for judgment as a matter of law, new trial, and remittur were denied. Skillz's motion for disgorgement was granted, but not to the extent it had requested; Skillz also was awarded attorney fees and other litigation costs. Papaya has announced its intention to appeal the decision (Skillz Platform Inc. v.Papaya Gaming, Ltd., No. 1:24-cv-01646-DLC (S.D.N.Y. Jul. 27, 2026)).

Background. Skillz Platform, Inc. (Skillz) and Papaya Gaming, Ltd. through its associated entity, Papaya Gaming LLC (collectively, Papaya) compete in the real money skill-based mobile gaming (RMSB) market. In light of the diverse state and federal laws that regulate gambling and other games of chance, purveyors of such online gaming need to demonstrate that the online games they facilitate are in fact games of skill. In 2024, Skillz sued Papaya, alleging that Papaya's purported players in the games it hosted were in fact autonomous computer programs (bots) and not actual human competitors; Skillz asserted two causes of action: (1) false advertising under the Lanham Act [15 U.S.C. § 1125(a)(1))]; and (2) false advertising as an unlawful deceptive act and practice under New York state law [N.Y. Gen. Bus. L. § 349].

At a ten-day jury trial in April 2026, Papaya was found liable to Skillz for false advertising on both the Lanham Act and the GBL counts. In addition to the $420 million damages award, the jury returned advisory disgorgement verdicts totalling $1.371 billion in Skillz's favor for Papaya's unjust profits and unfair cost savings.

Post-trial motions submitted by both Papaya and Skillz were entertained and ruled upon.

Papaya's motions – Judgment as a matter of law. The judge denied Papaya's post-trial motion for judgment as a matter of law. On this issue, Papaya had questioned the models used by Skillz's expert. The "but-for world" in the alternative models suggested by Papaya could not have been used by Skillz to enter the RMSB market while Skillz truthfully described its product in its advertisements. The harm incurred by Skillz all flowed by Papaya's surreptitious use of nonhuman bots as competitors in Papaya's games.

Additionally, the judge rejected Papaya's contention that the enterprise damages calculated by Skillz's expert could only pertain if Skillz was completely driven out of the RMSB market.

Skillz's Lanham Act false advertising claim rested on Papaya's assertions to the effect that Papaya's games were fair and skill-based, and Papaya had no interest in the outcome of those games. These were adequately proven at trial to be false; unlike as with the human players who won Papaya's games, Papaya did not actually need to remit any funds to the bot players described in human terms who won a Papaya game. For similar reasons, false advertising was found with regard to Skillz's NY GBL claim.

Papaya's motions – new trial or remittur. The court denied Papaya's motions for a new trial or remittur for the same reasons as Papaya's motion for judgment as a matter of law was denied. "Papaya has not shown that the verdict was against the weight of the evidence or that a miscarriage of justice has occurred."

The jury award under the circumstances was not "so high as to shock the judicial conscience and constitute a denial of justice," even though the jury award of millions here stood out in comparison to other jury awards in the Second Circuit that measured in the hundreds of thousands of dollars. The competition here was "in a new online industry where billions of dollars in revenue were available to the successful RMSB company." Papaya's conduct was particularly egregious. As Papaya's revenues escalated, Skillz's diminished. The judge accordingly let the jury award stand.

Skillz's motions – disgorgements and enhanced monetary relief. The court granted Skillz disgorgement in the amount of $719 million. On March 23, 2026, the judge had granted Skillz's request for disgorgement to the jury for an advisory opinion [Fed. R. Civ. P. 39(c)(1)]. The jury's advisory award was $719 million for Papaya's unjust profits and $652 million for Papaya's unfair cost savings. The judge found that the $719 million standing alone "properly reflects the magnitude of the benefit that Papaya improperly received from its false advertising campaign." In declining to award Skillz a greater disgorgement amount, the judge noted that Papaya had discontinued the use of bots, and, given the magnitude of its dollar loss and litigation publicity, was unlikely to repeat its unlawful conduct. The judge also declined to reduce the revenue figure used in the court's and expert's calculation by the 13 percent Papaya had insisted was revenue from non-US sources because Papaya's substantiation of that number was based "on a single graphic in a single document" prepared to entice investors, with no further evidence of Papaya's extraterritorial revenue during the relevant period.

Skillz's motions – attorney fees and other costs. The judge awarded Skillz $10 million in attorney fees, approximately $6 million less than requested. The case was exceptional, with "ample evidence that Papaya acted willfully and in bad faith." "Papaya slow-walked and obstructed the production of critical discovery material through the entire discovery period," thereby increasing both its own and Skillz's counsels' efforts.

During the pre-trial period, Papaya executives invoked their Fifth Amendment rights against self incrimination when their depositions were sought; the same executives subsequently walked back on their Fifth Amendment privileges, thereby requiring Skillz's counsel to travel to London to take depositions. The court also awarded Skillz the costs it incurred in connection with the Papaya witnesses' Fifth Amendment privilege claims.

The Case is No. 1:24-cv-01646-DLC.

Judge: Cote, D.

Attorneys: Amy Katherine Nemetz (King & Spalding LLP) for Skillz Platform Inc. Anthony Joseph Dreyer (Skadden, Arps, Slate, Meagher & Flom LLP) for Papaya Gaming, Ltd. and Papaya Gaming, Inc.

Companies: Skillz Platform Inc.; Papaya Gaming, Ltd.; Papaya Gaming, Inc.

Cases: Advertising StateUnfairTradePractices NewYorkNews