Papaya founder and CEO Oriel Bachar is set for the fight of his life. Three months ago, the District Court for the Southern District of New York ruled that the company must pay $719 million to its American rival Skillz.
The court ruled that Papaya had presented its games as fair competitions between human players, while in reality, it employed bots that influenced the outcomes, without informing participants. Now, Papaya Gaming (not Papaya Global, a completely different company specializing in global payroll and payment management) is filing an appeal. In its first response to the ruling - an amount that threatens the very company he built - Bachar stresses, "We acted with pure intentions and did nothing underhanded."
"It hurts. It’s agonizing. We believe we were prevented from presenting critical evidence and testimony during the trial," he explains, sharing his side of the story in an exclusive interview with *Globes*. "We weren't allowed to testify. We felt treated unfairly during the proceedings. Our entire focus is now on the appeal."
Meanwhile, at the company's request, the Tel Aviv District Court has stayed the start of collection proceedings against it in Israel (noting that the judgment is not yet final and, therefore, not enforceable in Israel). The filing is intended to prevent Skillz (which changed its name to Firy last June) from taking immediate enforcement action in the US - steps that could potentially lead to Papaya’s collapse.
At the same time, the company has petitioned a Delaware court to recognize the Israeli proceeding as the "main" proceeding - a move that has stayed the legal actions against it. Consequently, the company is currently protected from any disruption to its operations in that jurisdiction. The company seeks to reach a settlement arrangement that would allow it to continue its operations, under which the debt would be repaid over a period of 6.25 years, overseen by the appointed settlement administrator, Adv. Gil Oren.
"It’s not gambling"
Papaya Gaming was founded a decade ago by Bachar, Alex Liakhovetsky (VP R&D), and Andrey Birman (CTO), and achieved meteoric success in a relatively short time. The company develops and operates a range of competitive, skill-based mobile games including Solitaire Cash, Bingo Cash, and Bubbles Cash, in versions where users can compete against one another and win cash prizes.
The business model is structured so that participants pay an entry fee to compete, with the opportunity to win real money. "We create an interface where players can compete against each other, establishing a skill-based arena," says Bachar, emphasizing that the company’s games are based on ability and do not constitute gambling.
"We pair players together and earn a commission. We generate 15 million gaming sessions a day, involving one million players, and we take a commission from every competition. Instead of the prize pool equaling the total sum of the participants' entry fees, I deduct 15% to 20% depending on the specific competition. It’s more akin to a stock exchange: I connect participants and charge a commission."
Papaya maintains a US subsidiary that provides "fronting" services and handles the processing of player payments, though actual operations are managed from Israel. By 2021, the company’s revenue had reached $163 million, peaking at $533 million in 2024. 85% of this revenue is derived from players in the US.
The concept proved successful, and revenue poured in. However, in 2024, a competitor - Skillz, a publicly traded US company that had entered the market about seven years before Papaya, filed a lawsuit against Papaya, alleging unfair competition. Among other claims, the suit alleges violations of the Lanham Act, the primary US federal trademark statute, which prohibits advertising that misleads the public or harms competitors.
Skillz argued that while Papaya presented its games as competitions between human beings, it actually incorporated bots into the gameplay without proper disclosure. Skillz claimed this practice misled consumers, granted Papaya an unfair competitive advantage, and harmed Skillz’s own business.
In this gaming market, a large number of active players on the platform is required to ensure rapid matchmaking for games. Skillz claimed that while it invested large sums in acquiring and retaining players, Papaya used bots, allowing it to offer a better user experience at lower cost.
The shattering ruling
In the US, unlike in Israel, legal proceedings generally do not drag on for years. The trial began on April 13, 2026, and within ten days, on April 23, the jury delivered its verdict, setting direct damages at $420 million. The judge replaced the jury’s award with a judgment based on the disgorgement of profits, and in July, set the final amount at $719 million.
The jury found Papaya liable for false advertising, having presented its games as fair and skill-based, claiming that players of similar skill levels competed against one another to ensure an equal opportunity, all while failing to disclose the use of bots. The ruling leveled harsh criticism at the company, portraying its conduct as deceptive.
According to the ruling, between 2021 and 2023, the company employed bots to rapidly populate tournaments with large numbers of participants, as well as "tailored bots" designed to dictate whether a player won or lost. For instance, a win could be engineered for a player currently on a losing streak, to encourage them to keep playing.
Evidence presented in court revealed that, during this period, 13 million bots participated in the tournaments, compared to 11 million human players. According to the ruling, in January 2021, Papaya utilized bots in 90% of its cash-prize tournaments; by the time it ceased this practice at the end of 2023, bots were being used in 50% of the games.
It was undisputed that Papaya used bots until the end of 2023 to populate tournaments, and that it voluntarily discontinued this practice even before the lawsuit was filed. Bachar explains this by stating: "The need gradually diminished because we had a sufficient number of users, and everything was functioning as intended."
The ruling established that Papaya achieved a significant presence in the US market within a short period, while investing only a fraction of the capital deployed by Skillz. The judgment further noted that the competitor had invested over $1 billion in its games yet had not become profitable by the time of the trial.
The ruling states that Skillz’s revenue fell 60%, from $384 million to $152 million, in the same years that Papaya was using bots. In this same period, Papaya’s revenue grew from $163 million to $461 million.
The court determined that in the competitive gaming market, one platform’s gain is another’s loss. It further concluded that Papaya’s misleading advertising caused the competitor to lose customers and market share - a contention that Papaya insists is incorrect.
"Bots are a standard in gaming"
Bachar repeatedly emphasizes that while he respects the US court’s ruling, he rejects these various findings and maintains that the games were fair. Papaya asserts that it did not violate the law, did not make false claims in its advertisements, and caused no harm to its competitor.
Why did you use bots in the first place?
"Bots are a standard in the gaming industry. They are designed to enhance the user experience and reduce waiting times. The use of bots, or, as I prefer to call them, 'automated participants' is very common in the industry, and there is no law prohibiting it."
There is no regulation specifying whether the use of bots is permitted or prohibited. The lawsuit was based on allegations that Papaya’s advertisements were misleading. But Bachar says, "The negative perception of bot usage during the trial is what led the jury to rule against us, even though there is no prohibition against it."
One of the barriers to entry in the gaming market is the need for a large user base to ensure that players of similar skill levels can be matched (a concept known as "liquidity"). Bachar explains, "Papaya matches players together; when a particular game lacked sufficient liquidity, these automated participants - the bots - provided it."
As an example from a different market, Bachar cites Citadel, one of Wall Street’s major financial groups, which functions as a "market maker." Its role is to generate liquidity on the exchange, ensuring that there is always a counterparty ready to buy or sell securities. Bachar explains that Papaya operates in a similar fashion, connecting players with one another.
"The system matches players into competitions, a process that fluctuates based on the time of day. For instance, there is less liquidity at 3am than in the evening, simply because people are asleep. The entire purpose of this -using bots - is to generate that necessary liquidity. Our automated players serve a single function: market making - successfully matching players for competitions. We relied on this more heavily in the early stages, but its use has since tapered off. We implemented this to enhance the user experience and our sole objective was to maximize the entertainment value."
"A 'dollar-for-entertainment' business model"
According to Papaya’s model, players deposit funds into the system and use them to pay entry fees for tournaments. Those who lose forfeit their money, while winners receive the total pool of entry fees, minus the commission charged by the company. According to Bachar, when accounting for the aggregate of all losses and wins, the company actually incurred a loss during the period when bots were in use.
You claim that the use of bots resulted in a $40 million loss for the company. How so?
"That figure is based on assessments by financial experts. It represents the prize money won by human players as a result of the bots' presence.
When a human player wins against a bot, the company loses money, because the bot didn't pay an entry fee, yet the prize pool is determined by the number of participants (minus the commission). We implemented this solely to enhance the user experience."
It should be noted that if a bot wins a tournament, the money paid by the human players remains with the company. However, the bots themselves, as mentioned, do not pay entry fees.
The court found that you employed bots capable of controlling the outcome, ensuring a win or a loss (i.e., "tailored bots").
"The description of the bots in the court ruling is inaccurate. All the bots were used to ensure liquidity and to facilitate better matchmaking between players. We have an expert opinion analyzing our games. We were not permitted to present it in its entirety. All competitions were fair, legal, and operated in the player's favor.
"So-called 'tailored bots,’ which, according to the court ruling, were designed to control the outcome, were used to a limited extent to correct imbalances in the matchmaking mechanism. When a player won or lost too frequently, the system would calibrate their skill level using these bots. 'Win-tailored bots' were used 4.3 times more often than 'loss-tailored bots'."
It should be noted that Papaya argued this figure proved the bots were used to improve matchmaking rather than to cheat - a claim the court rejected.
Why didn't you disclose to the players that they might be competing against bots?
"The use of bots is a standard, accepted practice in the gaming industry. These bots were part of our matchmaking system, which is a trade secret. We are honest, decent people. We never claimed that users play exclusively against real human opponents. The real question is: why should I be required to disclose proprietary commercial information on our matchmaking system?"
Don't you think players had a reasonable expectation to know whether they were playing against automated entities?
"The reality is that no one ever truly knows what is going on in the mind of the person sitting next to them. I have no idea what anyone was thinking. At the end of the day, there was entertainment value - it was fun. We’re in the business of providing entertainment in exchange for money. People pay because they enjoy the competition, the recognition, and the sense of belonging."
The court ruling stated that Papaya closed the accounts of users who complained about the use of bots, and that the company lied about such usage. Is that what happened?
"Papaya receives hundreds of thousands of customer service inquiries on various matters. When a player complains repeatedly and expresses dissatisfaction, our standard practice is to refund their money and close their account, simply because that player clearly didn't have a good experience."
When asked whether the company lied when customers reached out, he replied that he cannot answer due to the ongoing appeal, adding, "I have a lot to say."
"They’re demanding seven times our profit."
Papaya categorically rejects the court’s finding that its success necessarily came at the expense of Skillz. "There is no causal link between Papaya’s advertisements and any decline in Skillz’s revenue," says Bachar. "Especially considering that other companies also use bots. They’ve framed this as a zero-sum game - either you or me - but there are other players involved. Significant evidence we presented was not admitted during the trial."
Bachar also insists there is no connection between the failure to disclose the use of bots and the massive sum awarded to the competitor, nor to the decline in the rival’s revenue. "Our expert witness testified that the amount awarded was not a quantification of the advertising. Our profit during that period was $106 million. The judgment was seven times higher." During the trial, Papaya argued that Skillz failed to provide evidence on how many players were exposed to the advertisements, which formed the basis of the lawsuit.
Bachar and the company’s senior executives did not testify at trial. During the pre-trial testimony phase in March 2025, Papaya’s executives exercised their right to remain silent (the privilege against self-incrimination). A year later, they sought to testify, but the judge denied the request, noting that doing so at that stage would unfairly prejudice Skillz.
Why didn’t you testify, and why did you later change your minds?
"During the pre-trial proceedings, we were told there was an alleged investigation into us by the US Department of Justice. As soon as we learned of this, our attorneys requested a postponement of the trial, but the request was denied. After a long period during which no investigative steps were taken, we asked to testify. The judge did not allow it. None of the company’s witnesses were permitted to testify before the jury, except experts, whose testimony was also restricted, and in a one-sided manner at that."
Regarding a countersuit filed by Papaya as part of the main proceedings, all of Papaya’s claims were rejected. The judge ruled that the company had failed to present sufficient evidence to support the various allegations it raised, or to substantiate any damages it claimed to have sustained.
At age 12, he sold jewelry door-to-door
Bachar (36) was born in Israel. His father was a diplomat with the Ministry of Foreign Affairs and met his mother while working in Panama. The family moved frequently due to his father’s career, and Bachar changed schools every three years. He attended school in Mexico, Guatemala, Chile, Russia, and elsewhere.
He studied at American schools alongside the children of ambassadors and was introduced to the world of commerce and business through his mother’s family, who lived in Panama. "There is a very strong Jewish community there that is deeply involved in trade. I saw a whole world there and was drawn to the business realm. I became an entrepreneur at a very young age," he recounts.
However, Bachar struggled to pursue his ambitions: "As a family serving as representatives of the Ministry of Foreign Affairs, we were prohibited from engaging in business. I would constantly start ventures, and my father would shut them down."
At 12, he took merchandise on consignment and went from house to house in Panama, selling jewelry. By 16, he had already established a billboard business in Chile. He arrived for his military service with a heavy accent and enlisted in the Sky Rider tactical UAV unit in the Artillery Corps.
After his military service, he began working in business development for various companies, eventually joining the startup Hola, which enables businesses to gather information about their competitors. "I started in business development and quite quickly became the number two person there. I stayed for 18 months. I tend to exhaust an experience very quickly. The moment they wanted to promote me, I knew it was time to leave. I panicked. I told them, 'I’m only here to learn.' My father wanted to kill me."
The idea to found Papaya stemmed from his childhood experiences in the world of gaming. "When you move from place to place and don't speak the language, you end up spending all your time with your family and siblings. I played Super Mario, Nintendo, and Atari," he recollects. "But I felt something was missing: competition. I couldn't understand why you couldn't choose your opponent or compete directly against one another."
Furthermore, he was bothered by the fact that, at the time, it wasn't possible to play skill-based games for real money. "I was driven to build something significant in the business world, and I spotted an opportunity - one that didn't require a license (meaning it didn't fall under 'gambling,' which requires a license in jurisdictions where such activities are legal)."
Bachar teamed up with Alex Liakhovetsky, a childhood friend from Ra'anana who had served in a classified army tech unit. Andrey Birman, who had served with Liakhovetsky, also joined the pair. Papaya was born on the balcony of Liakhovetsky’s parents' home. Initially, they struggled to attract investors interested in this sector in Israel, so family members and friends became their first investors.
"The entire product originated from the creation of a game alongside a platform (a technological infrastructure that allows competitions), where the game accounts for 10% and the platform for 90%. We built a platform disguised as a game. The core of the product is the ability to manage competitions, award prizes, and create a competitive environment. We have three games. We try out several each year, and one of them ends up surviving. In my view, we are really just at the beginning of this category."
For the first two years, the three founders held day jobs while simultaneously developing the company. It was not until the end of 2018 that they transitioned to working for their own company full-time. The first investor was a relative of Bachar’s from Panama, who invested $120,000 in exchange for a 6.5% stake in the company, which he later sold for a massive profit.
Bachar says the first significant round of financing round came from NFX, the US-Israeli venture capital fund founded by Gigi Levy-Weiss, which invested $2.5 million at a valuation of $7.1 million.
One of the unusual aspects of Papaya’s growth story is the limited amount of external capital it has raised. Since its inception, the company has brought in only about $3.5-$4 million in direct capital, avoiding large-scale financing rounds. In its most recent funding round in 2020, Papaya was valued at $47 million.
In the years that followed, additional investors came on board - some through "secondary" transactions, meaning they purchased shares from existing shareholders rather than injecting new capital into the company. In this way, Papaya managed to grow its annual revenue to about $500 million (according to company data) without relying on the massive rounds that characterized many other tech companies in that boom period.
In 2020, the founders moved into their first office, with 30 employees. Today, the company spans several floors in Tel Aviv’s Sky Tower.
"There is more to all of us than meets the eye."
Bachar chose the name Papaya because of the fruit's shape. "When you cut open a papaya, it forms a star shape and there’s a star in 'Mario,' too. It’s as playful as it gets. Besides, we all have something inside us that goes beyond what meets the eye. It felt interesting, playful, and cool. I figured, Apple managed to succeed, so why not Papaya?" he explains.
He recalls that when they chose the name, they were unaware of Papaya Global or the children’s shoe chain of the same name. They purchased the domain from a Chinese couple who were both doctors.
Why did you officially drop the word "Gaming" from the name four years ago?
"We felt that the company is more than just a gaming company. Our vision is to build a community of players centered around competitive gaming - a vision rooted in a specific philosophy. Just as streaming transformed the television industry and social media reshaped the world of content, competitive play is now transforming the gaming world. People want to be part of the content. They no longer want to sit alone in the dark like someone in a cave but rather to compete, showcase their skills, and earn rewards for their performance. It’s a universal desire.
"Our dream is to define this category of 'competitive play' - playing against others rather than against the computer - which is still in its infancy. We are building a competitive infrastructure. It’s not just a game; it’s a layer of competition that is the core product. In the future, this layer could be integrated into many more games, not necessarily just our own."
What does the court ruling mean for this dream?
"For the past two years, a major portion of our management’s focus has been tied up in legal proceedings, yet we continued to invest in our product and our plans. Our goals remain unchanged. This settlement will allow us to focus on the market and on establishing this category. We aim to build the largest community of gamers in the world. That is what gets us up in the morning."
Published by Globes, Israel business news - en.globes.co.il - on October 22, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.