Papaya creates $100 million safety net while appealing $719 million Skillz ruling
The Israeli gaming company says the supervised payment arrangement will preserve its operations and protect creditors if the U.S. judgment ultimately stands.
Papaya Gaming is seeking to buy itself time in its $719 million legal battle with Skillz. The Tel Aviv-based gaming company secured a temporary stay of proceedings from an Israeli court as it fights to overturn a U.S. ruling it says was based on significant legal and factual errors.
The Tel Aviv District Court, under Judge Iris Lushi-Abudi, approved Papaya’s request for a temporary stay of proceedings as part of the company’s effort to establish a supervised payment arrangement. The move is intended to preserve business continuity and protect the company’s employees and customers while Papaya continues its appeal process in the United States.
The legal action follows a ruling issued by a federal court in New York in a lawsuit between the two companies, which ordered Papaya to pay Skillz $719 million. Papaya has argued that the ruling contains material errors and deficiencies in the administration of justice and said it intends to overturn the decision through an appeal process that could take several years.
Papaya emphasized that the U.S. ruling has not yet become enforceable in Israel and that the stay of proceedings is intended to prevent unilateral enforcement measures by Skillz that could disrupt the company’s operations.
The company said the supervised payment arrangement applies only to legal claims filed against Papaya and does not affect its commercial operations. Papaya said it continues to operate normally, meet its obligations to employees, suppliers and service providers, and maintain players’ ability to withdraw funds from its applications.
Under the framework presented to the court, Papaya will transfer available cash balances into a designated fund overseen by an official appointed on behalf of the court. The fund is expected to include approximately $100 million during 2026, along with tens of millions of additional dollars annually, which would serve as a potential source for settling claims should the U.S. ruling remain in place and become enforceable in Israel.
According to cash flow projections submitted by the company, Papaya’s ongoing operations are expected to continue generating significant positive cash flow.
In parallel with the proceedings in Israel, Papaya has filed a request for a similar temporary injunction with the federal court in New York, seeking to prevent enforcement measures overseas until the appeal process is completed.
Papaya said in a statement: “Due to the company’s success, and in order to protect our employees and customers and allow us to continue operating normally until the appeal in the United States is decided, we have requested a supervised payment arrangement from the court. This is a proactive, responsible and controlled step designed to preserve the company’s operations and protect the rights of all parties during the appeal period.”
The company added: “We believe the ruling contains material errors and that the chances of success in the appeal are significant. The framework we proposed will allow the company to continue operating and growing while generating the resources over time that will ensure the rights of all parties are protected.”
