Israeli gaming giant Papaya Gaming files for bankruptcy in the US following court loss

Israeli gaming company Papaya Gaming, operator of popular mobile titles including Solitaire Cash, has initiated bankruptcy proceedings in the United States to seek protection from creditors after a court ordered it to pay $719 million to competitor Firy, known as Skillz.

This procedure is not considered bankruptcy in the traditional sense; rather, it is intended to protect the company's assets in the United States while it manages insolvency proceedings in Israel and appeals the American court ruling.

The ruling was issued after a jury determined that Papaya used bots in its cash games, misleading consumers and violating advertising laws. Following the decision, the company was ordered to pay $719 million in damages, including attorney fees and court costs.

In parallel with the US proceedings, the Tel Aviv District Court granted the company a temporary stay of proceedings. Under the plan presented to the court, Papaya is expected to transfer approximately $100 million during 2026 to a dedicated fund overseen by a court-appointed official, along with tens of millions of dollars more in subsequent years, should the ruling become enforceable in Israel.

In its court filing, the company admitted that it is unable to pay the debt if the ruling becomes final. However, it emphasizes that this is a strategic move intended to ensure the continuation of its operations while the appeal is pending.

"Given the company's financial success, this is a proactive and responsible move in accordance with the laws of Israel and the United States, which will allow us to continue operating as usual until the appeal is decided, a process that may take several years," the company stated.

Papaya further emphasized that its business operations are continuing as usual, and that it continues to meet all its obligations to employees, players, suppliers, and service providers without any changes.