Papaya Gaming‘s response to a lawsuit from Skillz has been to deny that using house bots would be deceitful or cause any harm to its users, on the grounds that it has never explicitly claimed not to do so. Skillz, a rival company in the mobile skill gaming space, alleges that Papaya fraudulently uses bots masquerading as human contenders in games it promotes as “totally fair and skill-based.”
Papaya is one of several skill gaming companies to have received investment capital from Drive by DraftKings, a startup incubator founded by the US online gambling giant. Skillz pursued Papaya in court after winning its lawsuit against another rival, AviaGames. Although that case began as a patent infringement suit, it brought evidence to light of bot use similar to what Skillz is now accusing Papaya of.
Papaya’s claims took place in early May during oral arguments before New York Southern District Court Judge Denise L. Cote.
Transcripts of Papaya’s arguments for dismissal won’t be public available for several months. However, subsequent written responses by both parties reference what was said during the hearing. This includes the claim by Papaya that the company doesn’t believe that pitting human players against house bots would constitute wrongdoing.
Correction: This article originally presented Papaya’s arguments as effectively admitting to the alleged bot use. However, Papaya has only accepted the allegations for purposes of its motion to dismiss. That is, its argument is that even if it were using bots, there would be no wrongdoing.
Skillz Pans Papaya’s ‘Fatally Flawed’ Motion
According to Skillz, Papaya based its dismissal request on the basis that it “has never denied or refuted that it deployed bots.”
Per Skillz’s May 28 opposition brief, that representation, which it says Papaya never extended to consumers, is “outside the four corners of the Complaint.”
Further, Skillz argues that the claim is “tantamount to Papaya confessing that its advertisements and representations have been misleading, and intentionally so.”
Besides attempting to deflect from allegations that Papaya’s misleading advertisements and use of bots deceive players, Skillz says Papaya’s motion reflects a “curious blend of improper factual assertions” and “philosophical musings about whether general ‘bot usage’ is ‘necessarily inconsistent with’ fair gaming.”
Skillz’s response also indicates Papaya contends allegations of consumer confusion connected to its misleading advertising—supported by public player statements—should be tossed because the statements are “inadmissible.”
According to Skillz, such arguments have no place in a motion to dismiss under the cited rules. At best, they say they are challenges to the merits requiring discovery.
Further, Skillz argues that the motion is “fatally flawed” because Papaya failed to “cite a single case” backing its argument.
Worse, Skillz says, Papaya’s motion intentionally ignores its factual allegations, which claim:
- Papaya does not disclose its bot usage to consumers
- Papaya makes consumers believe that only human players participate in games on its platform
- Papaya earns money by winning its tournaments by secretly deploying robots.
In a court filing, Skillz states:
Nowhere does Papaya grapple with its representations that it has ‘no vested interest’ in who wins any individual game or its statements that winners of games will be “individuals.”
It also argues that Papaya fails to address allegations that players’ suspicion of bot use “will ultimately drive consumers away from mobile gaming entirely.”
Skillz says that bot abuse by competitors will harm its business by “reducing the size of the potential market.”
Brief Argues Bot Use Creates Unfair Advantage
Expanding on the above, Skillz adds that Papaya’s use of bots would make it impossible for “compliant” companies to compete.
Papaya’s systematic use of bots in its tournaments has allowed Papaya to exponentially grow its user base while slashing its user acquisition costs by artificially enabling players of its games to quickly match with an ‘opponent’ no matter when they log on to play a game—creating a level of player liquidity legally compliant companies like Skillz (who must make substantial investments to acquire users) cannot compete with.
Further, Skillz alleges that Papaya essentially functions as an illegal casino “collecting money from participants who compete against—and often lose to—the ‘house.'”
None of the extrinsic evidence proffered by Papaya meets these criteria or justifies Papaya’s overreach in seeking dismissal of a complaint by resorting to judicially noticed materials. Papaya’s argument that its use of bots does not preclude its games from being skill-based depends on accepting ‘a body of research among experts in the field of artificial intelligence and game-playing,’ including dubious articles that are over twenty years old.
…For the foregoing reasons, Skillz respectfully submits that the Court should deny Papaya’s Motion.
Papaya Attacks Skillz’s ‘Conclusory Premises’
Papaya, firing back in support of dismissal, claims Skillz’s case rests on “conclusory” premises and “inferential leaps” that its complaint “flatly contradicts.”
Skillz obscures the fact that the Complaint itself wholly undercuts the central premise of Skillz’s deception theory by expressly recognizing that ‘Papaya does not actually deny or refute customers’ accusations that it deploys bots’
Furthermore, Papaya argues that Skillz continues to presume the alleged use of bots automatically renders false Papaya’s claims that its games are “fair and skill-based.”
Papaya’s legal team writes:
Squarely contradicts itself by acknowledging both that “by using bots, Papaya can infinitely increase the number of similarly- skilled ‘opponents’ that a player can be matched against” and that Papaya can ‘program its bots to compete at various skill levels.’
Notwithstanding those concessions, Papaya says Skillz’s complaint improperly shifts the burden of showing how bot use would fail to alter its game’s skill-based nature.
But that is not the law. Skillz bears the burden to plausibly allege facts supporting its claims. Worse yet, Skillz engages in a double standard by recognizing that games on its platform can use bots to ‘ensur[e] gameplay fairness.’
Additionally, Papaya says Skillz bases its deception claims on anonymous, unsubstantiated online posts and fails to implicate any of Papaya’s marketing messaging in its complaint.
Skillz must plead plausible facts supporting a conclusion that using bots in Papaya’s games renders them no longer skill-based, and Skillz’s mere conclusory statements that bots are not skill-based, and not fair, do not satisfy its burden to allege facts that ‘allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’
For these reasons and more, Papaya reaffirmed its request for dismissal, this time with prejudice.
Skillz Hopes Litigation Spurs Federal Action
The suit against Papaya isn’t the first time Skillz has challenged bots in skill-based games.
In February, a California jury awarded Skillz a $42.9 million judgment in its patent-infringement case against AviaGames. During that case, evidence surfaced that Avia used bots as competitors in its purported skill-based games. Now, Avia is facing a federal subpoena over the bot allegations. Avia’s customers have also launched a class-action lawsuit over the alleged deception.
Skillz followed that win by launching its case against Papaya on March 4.
As reported by Venture Beat, Skillz CEO Andrew Paradise commented on the outcome of the Avia case and the subsequent settlement during an earnings call in May. While on the call—only days after Papaya made its motion to dismiss—Paradise said Skillz is fighting “the outright theft of billions of hard-earned dollars.”
Paradise added that Skillz hopes its litigations will spur the government to protect consumers. However, in the meantime, it’s not giving up its battle.
Skillz will continue to combat the deceptive usage of bots until systemic fraud in our industry is eliminated. Creating a fairer future in gaming is good for consumers, our industry, as well as for Skillz.
Notably, Papaya is also facing a New York class action over its alleged bot use. In that case, also before Judge Cote, informal disclosures are due by June 30. How the actions may impact one another remains to be seen.
Bonus contracted both Skillz and Papaya for further comment. As of publication, Skillz has not responded, but a Papaya spokesperson shared the following on behalf of the company:
Papaya is one of the world’s largest skills-based mobile game developers – on a mission to bring more fun challenges to the world. We are absolutely committed to fair and enjoyable skills-based mobile gaming that rewards the abilities of our players. We will continue to vigorously defend against any and all baseless claims and remain focused on our mission.
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