Skillz booth at developer's conference

Is your solitaire opponent actually a bot?

A dispute between two gaming companies over a patent has turned into a criminal investigation and a lawsuit for running an illegal gambling business. The outcome may end up revolutionizing the competitive online gaming industry

A dispute over two patents between two gaming companies has turned into a series of lawsuits that undermined the value and reputation of both companies, and turned into a criminal and federal investigation, as well as a class action lawsuit for running illegal gambling businesses, cheating and fraud.
It all started in 2021, when the American gaming company Skillz sued the American gaming company AviaGames. In the lawsuit, focused on intellectual property, Skillz, the older and larger company, claimed that AviaGames, the smaller and younger firm, used the patents Skillz had developed without permission in one of its applications.
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ביתן של סקילז בוועידת מפתחים
ביתן של סקילז בוועידת מפתחים
Skillz booth at developer's conference
(Photo: Bloomberg)
Both companies operate in a very specific field of "games of skill" in real time (or Skills) — although the word "skill" may be a little exaggerated: it refers to games in which different (real) users compete online against each other for money.
The games are quite simple and include card games such as solitaire or blackjack, bingo games, Tetris or Bubbles. The competition takes place in a tournament format and great importance is given to creating fair conditions between the participants - so that neither luck nor large differences in the quality of the players will decide the game.
In this framework, it is ensured that strong players do not compete against fundamentally weak ones. To this end, companies operating in the field develop tools unique to them, among other things, an algorithm that defines the skill level of the players, and another algorithm that verifies the fairness of games by evaluating the results of the players. The emphasis on skill is important, as it allows in the United States and other countries to distinguish such games from gambling. The first requires "skills" to win, the second - mostly luck. According to this model, the gaming company is not defined as a "casino", in the sense that it cannot win money by itself, and therefore the gambling model in which "the house always wins", is apparently not valid. It is all meant to provide a general feeling and legitimacy of "sportsmanship", or "healthy competition" — not life-ruining gambling.
In games of skill, real money changes hands between the participants themselves, and is usually distributed within seconds after the game ends. Speed is also important because it produces instant gratification that is necessary to attract and keep players on the platform. The market is very popular and attracts millions of players per month, and is about 8% of the entire gaming industry and its value is estimated at about $10 billion.
Code name: "cucumbers"
Despite these rules, these games of skill must have some dimension or element of randomness to be fair. Skillz, which was founded in 2012 and is considered the first in the field, registered various patents whose purpose is to produce a certain randomness, such as for example that a Tetris player will not receive the same series of blocks at the beginning of each game. At the same time, the patent maintains that the difference in the first series between competing players will not be too great - and thus the game will maintain fairness, so that its results are based on the skill of the players and not just on the luck of receiving simpler blocks to arrange.
Skillz, which at its peak was valued at $11 billion, went to court in the United States claiming that AviaGames' Pocket7Games app is a "copy" of its patent-protected mobile gaming platform. AviaGames, which raised $620 million in 2021, asked to drop the claims against it, but its request was only partially granted.
As part of the legal proceedings, in May, Skillz requested access to AviaGames' internal correspondence and to review the company's source code - permission was given, and from here on the story got complicated.
Skillz claims that in some of the internal correspondence they found messages between AviaGames managers about the use of bots in their applications. From the material submitted to the court it appears that AviaGames called the bots by the code names "guides" and "cucumbers". Skillz argued before the court that AviaGames is playing bots against real players, who gamble with real money, and that the bots are winning money for the company. The method is quite simple: at first AviaGames allows the players to beat the bots, but after a few games, and with the human players having made a profit, it starts teaming them against bots that beat the real players. These bots are often based on a learning process of historical game moves made by real good players who used the platform in the past.
How does it work? At the beginning of each game, the application informs the player that it is looking for an opponent for the game, after a few seconds it assigns the player to another human player and at the end of the game the player is directed to the scoreboard with their score ranked among the other players, and depending on their position in the ranking the player wins cash. To enable these mechanisms that include finding an opponent quickly and summarizing tournaments in seconds, every gaming company that operates in the field needs what is known as "player liquidity". This means high accessibility for available players. If players have to wait a long time for a suitable opponent to be found (whose level will create fair competition) or wait a long time for an entire tournament to be completed for the results (and money), the more likely that player will look for another platform. Liquidity of players is therefore fundamental to the success of skill-based gaming platforms.
But liquidity of players is not an easy thing to achieve, especially in a young and new company. Skillz knows all this very well, and according to it the problem of player liquidity actually creates an incentive for young companies to use bots. This not only goes against the statements of the game platforms, but also allows the company itself to make profits. After these revelations, Skillz updated the lawsuit against AviaGames claiming that the company is a "corrupt organization engaged in illegal gambling" that uses "illegally obtained technology to make players pay money to compete with fake players". The judge in the trial stated that in light of the evidence, it seems that the executives of AviaGames, Vickie Chen and Peng Zhang, were aware of what was happening, among other things due to their use of the code names. In response, AviaGames claimed that Skillz "deals with exactly the things in which it accuses AviaGames". Chen and Zhang, who decided to remain silent, have since hired criminal lawyers to represent them.
Jessica's bot has a beard
In November, a federal judge in California announced that she would postpone the start of the trial regarding the intellectual property rights between the two parties. The reason for the delay is that AviaGames has been subpoenaed by federal prosecutors in New Jersey to testify as part of an investigation into allegations that the company secretly used bots to manipulate games that were supposed to feature only human players. A class action lawsuit was also filed against AviaGames last month by users who claimed that it cheated them.
In response to the class action, AviaGames quickly took down the terms of use page on the company's website, only to put up one that would include a clause according to which the users agree not to sue it and not to join the class action that has already been filed against it "alleging violations of California's Unfair Competition Law and the Anti-Extortion and Corrupt Organizations Act (known as - RICO)". AviaGames, it is evident, is already preparing for a major corruption lawsuit.