Skillz's Major Legal Victory#
Skillz Inc. (NYSE:SKLZ) experienced a dramatic increase in its stock value, surging over 200% on Thursday. This spike followed a jury's decision in a Manhattan federal court that found mobile gaming competitor Papaya Gaming Ltd. guilty of false advertising. The jury ordered Papaya to pay $420 million in damages to Skillz.
Disgorgement and Future Decisions#
In addition to the damages, the jury indicated that Skillz could receive $652 million in disgorgement. Disgorgement is a legal term that refers to the repayment of ill-gotten gains. Judge Denise Cote is expected to make a decision regarding this amount in early June. On the trading floor, Skillz shares reached as high as 443%, peaking at $20 before settling at $11, a 200% increase.
Details of the Case#
The verdict came after a week-long trial at the US District Court for the Southern District of New York. The jury, consisting of eight members, deliberated for just over two days before arriving at their conclusion. Skillz accused Papaya of misleading players by using bots instead of real competitors in some games and tournaments. Additionally, Skillz claimed that Papaya falsely advertised having paid out $6.7 billion in winnings, of which $4.7 billion was attributed to games won by bots.
Papaya's Defense#
During the closing arguments, Papaya argued that there was no evidence to support claims that it earned money from the disputed winnings, stating that its total revenue was below $1 billion. In response to the verdict, Skillz expressed satisfaction, emphasizing its commitment to fair competition and a transparent gaming experience for players and developers. The trial concluded earlier than expected, initially scheduled to last two weeks.