US Court Delays $719 Million Collection Against Papaya Gaming Over False Advertising Case

A Delaware court has temporarily halted collection efforts against Israeli company Papaya Gaming, which was ordered to pay $719 million to American competitor Scalis. The ruling stems from a judgment that Papaya used false advertising related to bot usage in its games. Despite the ruling, Papaya continues its regular operations.

Papaya Gaming initiated a legal process in the US to recognize an ongoing proceeding in Israel, where collection actions against the company have been temporarily frozen. The Delaware court scheduled a hearing for early September and barred any collection attempts in the US until then, citing a significant likelihood that the Israeli proceeding will be recognized. This means American creditors cannot currently pursue Papaya in the US.

In Israel, Papaya requested court approval for a supervised payment arrangement to maintain business continuity while appealing the US ruling. The company owes over 2 billion shekels (approximately $719 million), exceeding its cash reserves of $151 million. Under the proposed plan, Papaya will transfer available funds to a dedicated court-supervised fund and commit to paying nearly $100 million in 2026 plus additional tens of millions annually to cover the debt if the judgment stands.

Papaya Gaming welcomed the Delaware court's decision, stating it provides the certainty needed to continue normal operations until the recognition hearing. The company affirmed its commitment to managing the process responsibly and expressed confidence in its legal position.