Papaya Gaming Seeks Temporary Stay After $719 Million US Court Ruling

Papaya Gaming, operating in Israel and the US, has requested a temporary stay of proceedings and approval of a debt arrangement from the Israeli court following a $719 million judgment against it by a US court. The ruling requires Papaya Gaming to pay this sum to its American competitor, Skillz Platform. Papaya Gaming claims the US judgment contains significant errors and plans to appeal. Israeli Judge Iris Lushi-Avudi granted a unilateral stay order, published today, while Papaya Gaming also filed in New York federal court to recognize the Israeli proceedings as primary.

Papaya Gaming argues that Skillz's collection efforts in the US have failed and that the judgment amount exceeds its cash reserves of approximately $151 million. The judge noted no immediate enforcement actions are underway but acknowledged the risk of enforcement causing substantial harm to the company. Consequently, the temporary stay will remain until Skillz and the insolvency commissioner respond.

The company emphasized it has millions of customers, is highly profitable, stable, and generates annual revenues around half a billion dollars. It employs hundreds in Israel and described the situation as an exceptional one-time event threatening its business, not typical operational insolvency. Papaya Gaming proposed a debt arrangement to continue operating profitably, suggesting annual transfers of $60 to $100 million of available cash into a court-managed fund to ensure full creditor repayment if appeals fail.

The arrangement excludes ordinary trade creditors, who will be paid as usual. The funds would cover all legal claims, including Skillz’s judgment if it becomes enforceable in Israel. Papaya Gaming accused Skillz of using litigation to exert improper pressure and exclude it from the market, calling the judgment amount unprecedented and disproportionate compared to US court precedents.

The court requested Papaya Gaming to promptly submit the US court decision from May 15, 2026, to verify the stay does not conflict with US rulings. Papaya Gaming stated the stay preserves the status quo during the arrangement review and prevents enforcement actions that could harm its operations or favor one creditor over others. The order does not affect players’ rights to withdraw funds or the company’s ongoing payments to suppliers.

Papaya Gaming said the move is a responsible step to protect employees and customers and maintain normal operations during a potentially lengthy US appeal process. It affirmed full compliance with obligations to employees, players, suppliers, and service providers. The company remains confident in its appeal chances and believes the proposed framework will allow continued growth while securing creditor rights, including Skillz’s, if the judgment is upheld and enforced in Israel.