Israeli Gaming Firm Papaya Gaming Files for Bankruptcy to Delay $730 Million Payment to Skillz

Israeli gaming company Papaya Gaming has initiated bankruptcy proceedings in the United States, seeking court recognition of its insolvency process already underway in Israel. This move aims to delay the collection of approximately $730 million awarded to Skillz, a U.S.-based competitor, while Papaya appeals the ruling. The original judgment stems from an April jury decision that found Skillz suffered damages amounting to $420 million due to Papaya's actions. Following the verdict, Papaya requested to overturn the decision, hold a retrial, and reduce the compensation amount, whereas Skillz sought to increase the sum and add interest and legal costs. Ultimately, the court upheld a payment of $719 million based on profits attributed to Papaya.

Although the new bankruptcy filing does not annul the judgment, it could postpone enforcement of the payment during the ongoing appeal and financial restructuring. Earlier in the week, Papaya announced layoffs of 30 employees from its workforce of about 400, clarifying that the job cuts were unrelated to the legal dispute with Skillz. The case highlights significant financial and operational challenges facing Papaya amid its legal battle and restructuring efforts.