District Court Grants Papaya Gaming Temporary Stay of Proceedings

The case involving Papaya Gaming and Skillz continues. The District Court in Tel Aviv-Yafo, presided over by Judge Iris Lushi-Abudi, today approved a temporary stay of proceedings at the request of Papaya Gaming. The order was issued as part of the company's request for a supervised payment arrangement, with the goal of maintaining business continuity and protecting its employees and customers until a decision is reached in the appeal it is conducting in the United States.

This legal move follows a verdict issued in a federal court in New York in a lawsuit filed against it by its business competitor, Skillz, in which Papaya was ordered to pay 719 million dollars. Papaya emphasizes that the verdict contained material errors and flaws in the conduct of the trial, and it intends to overturn the decision as part of the appeal process, which is expected to last several years.

Papaya clarifies that the American verdict has not yet become enforceable in Israel, and that the stay of proceedings order is intended to prevent unilateral enforcement measures by Skillz that could disrupt the company's operations. The supervised payment arrangement applies solely to the legal claims filed against the company and does not affect its commercial activity. The company emphasizes that it continues to operate as usual, to meet all its obligations to employees, suppliers, and service providers, and that the players' right to withdraw funds from the company's applications remains unchanged.

As part of the outline presented to the court, Papaya will transfer its available balances to a dedicated fund under the supervision of a court-appointed official. The fund is expected to hold approximately 100 million dollars for the year 2026, and tens of millions of additional dollars each year, which will serve as a source for settling claims if the verdict remains in place and becomes enforceable in Israel. According to the cash flow forecast presented by the company, its ongoing operations are expected to continue generating significant positive balances.

Parallel to the process in Tel Aviv, Papaya filed a similar request for temporary relief this morning with the federal court in New York, with the goal of preventing enforcement measures overseas until the conclusion of the appeal.

Papaya stated:

"Due to the company's success, and in order to protect our employees and our customers and to allow us to continue operating as usual until a decision is reached in the appeal in the United States, we turned to the court for a supervised payment arrangement. This is a proactive, responsible, and controlled step, intended to preserve the company's activity and the rights of all parties during the appeal period. We believe that the verdict contained material errors and that the chances of the appeal are high. The outline we proposed will allow the company to continue to operate and grow, and at the same time to generate over time the sources that will ensure the rights of all parties."