US Court Delays $719 Million Collection Against Papaya Gaming Over False Advertising Case
Translated & summarized from Globes by baba
A Delaware court has delayed collection of a $719 million judgment against Israeli Papaya Gaming over false advertising claims, allowing the company to continue operations while appealing. Papaya is also pursuing a supervised payment plan in Israel to manage the debt and maintain business continuity.
The story in 6 lines · by baba
- Delaware court temporarily halts $719 million collection against Papaya Gaming.
- Judgment relates to false advertising about bot use in Papaya's games.
- Papaya continues normal operations amid legal proceedings in US and Israel.
- US court set a September hearing to consider recognizing Israeli proceedings.
- Papaya proposes supervised payment plan to cover debt exceeding $151 million cash reserves.
- Company welcomes court decision as it provides operational certainty during appeal.
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.
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