Categories: Gaming

Papaya Gaming wins U.S. chapter safety after $719 million ruling

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The U.S. Bankruptcy Court for the District of Delaware, presided over by Judge Mary F. Walrath, has granted Papaya Gaming’s movement for a short lived injunction, instantly staying assortment and enforcement proceedings in opposition to the corporate’s U.S. property and preserving the established order pending a listening to on Papaya’s petition for formal recognition underneath Chapter 15 of the U.S. Bankruptcy Code.

The U.S. resolution follows a short lived keep of proceedings granted a number of days earlier by Judge Iris Lushi-Abudi of the Tel Aviv District Court. As a part of the Israeli proceedings, Papaya requested the courtroom to approve a supervised cost plan that will enable the corporate to proceed its common operations whereas it pursues an enchantment of the ruling in opposition to it.

The non permanent aid was granted regardless of robust opposition from Papaya’s competitor, Skillz, which now operates underneath the identify Firy Inc. During the Delaware listening to, Skillz argued that Papaya ought to be required to publish a considerable monetary assure or, alternatively, face restrictions on transferring funds exterior the United States.

Judge Walrath rejected Skillz’s calls for and granted Papaya’s request.

“We welcome the Delaware court’s decision, which gives the company the certainty necessary to continue its regular operations until the recognition hearing,” Papaya stated in a press release. “We will continue to conduct the process responsibly and with faith in the justice of our path.”

The newest developments observe a ruling issued in late July 2026 by Federal Judge Denise Cote of the U.S. District Court for the Southern District of New York. The ruling adopted a jury’s discovering earlier this yr that Papaya had used automated laptop packages, or “bots,” in skill-based gaming tournaments whereas presenting them as human gamers.

Judge Cote ordered Papaya to pay roughly $719 million in disgorgement, in addition to roughly $10.1 million in attorneys’ charges and authorized prices. She additionally rejected Skillz’s request for a everlasting injunction that will have prohibited Papaya from working or required it to publish corrective notices on its apps.

Following the ruling, Papaya utilized to the Tel Aviv District Court for a short lived keep of proceedings. Under the proposed association, the corporate’s obtainable money and present earnings can be transferred to a delegated fund held by a certified consultant on behalf of the courtroom. The association was supposed to safeguard collectors’ rights if Papaya’s enchantment is in the end rejected.

Papaya subsequently filed for Chapter 15 recognition in Delaware, searching for to forestall Skillz from taking unilateral motion to grab U.S. property whereas the enchantment is pending.

Judge Walrath’s non permanent injunction now supplies Papaya with authorized safety within the United States whereas the Chapter 15 proceedings transfer ahead. The firm can proceed working its apps and gaming portfolio because it prepares to enchantment the underlying ruling earlier than the U.S. Court of Appeals for the Second Circuit.


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