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State of Play’s TL;DR
- Papaya Gaming has filed for Chapter 15 for recognition and cooperation with a foreign proceeding
- The company was recently ordered to pay rival Firy $719 million.
Papaya Gaming, the skill-based gaming company behind Solitaire Cash, has filed for Chapter 15 protection in the US after being ordered to pay rival Firy, formerly Skillz, $719 million. The lawsuit brought by Skillz, now Firy, has been active for at least two years.
The company says the filing is meant to protect assets and keep operations running while it appeals.
The case stands out because it combines a massive court judgment, alleged misconduct in skill-based games, and cross-border insolvency proceedings in the US and Israel.
Papaya says day-to-day operations and player accounts should not be disrupted by the filing itself.
Papaya found liable over advertising practices in real-money games
According to TheStreet, Papaya lost a false advertising lawsuit filed in 2024 and was ordered to pay $719 million to Firy. The award includes damages as well as certain attorney’s fees and costs.
A jury found Papaya liable over advertising practices tied to its real-money games, and a federal judge ordered the payout after findings that the company used computer bots while misleading consumers and violating false advertising laws.
Papaya, which is based in Israel, has also started a related process there and won a temporary stay of proceedings from an Israeli court while it fights to overturn the US ruling.
Chapter 15 filing more of a procedural move
Chapter 15 does not work like a standard US corporate bankruptcy filing. Bankruptcy attorney Sunni P. Beville told TheStreet it is “a procedural tool that allows a foreign restructuring proceeding to receive recognition and protection in the United States.” She added that the filing is intended to preserve assets and operations while restructuring efforts and appeals move forward.
Beville also said the filing itself is “not intended to halt day-to-day operations or immediately affect player accounts.” Papaya struck a similar tone in its own statement, saying the action allows it to “continue operating as usual” during the appeal and that it is continuing to meet obligations to employees, players, vendors, and service providers.
For the broader gaming industry, the case is notable because it centers on alleged use of bots in cash-prize competition and on how US courts may handle enforcement when an operator is based overseas.
What’s next?
The next key question is whether the US Bankruptcy Court will grant Chapter 15 recognition. Beyond that, the larger unresolved issue is Papaya’s appeal of the $719 million judgment.
Israeli proceedings could also shape payment of claims if the US ruling is ultimately enforced there.
For now, Papaya’s position is that the filing is a defensive move to maintain normal operations while those legal fights continue.
Based on reporting by Daniel Kline for TheStreet.
