(AsiaGameHub) –   A New York jury has found in favor of Skillz in its legal dispute with Papaya Gaming, granting $420 million in damages. The jury also suggested potential disgorgement amounts of $719 million and $652 million, which Judge Denise Cote will evaluate before making a final ruling later this summer.

Papaya retains the right to contest the verdict in post-trial motions, which could include requests for a mistrial or a lower judgment. Should the court determine a higher disgorgement figure, Skillz will have the option to select that amount instead of the damages award, but cannot collect both.

Papaya responded to the verdict, stating:

While Papaya respects the jury’s decision, we are disappointed with the outcome. We look forward to court review of the verdict. Papaya will continue to lead with integrity and transparency while remaining focused on our mission to deliver joy through exciting skilled‑based fair competition.

The lawsuit centered on the differentiation between various kinds of skill-based games and how the two companies steer clear of being labeled as gambling. Regulators in numerous states have started to examine this distinction, though they are only in the early stages of actively investigating if such games constitute gambling, especially for app-based and arcade-style game companies.

Skillz alleged that its business suffered a loss, including a drop in its share price, because Papaya misled the public by claiming it practiced fair matchmaking and definitively used bots for this purpose, while the two companies were not operating under the same principles.

Following the verdict, Skillz shares experienced a significant surge. The company welcomed the outcome, stating:

Skillz​ ​is​ ​pleased​ ​with​ ​the​ ​jury’s​ ​verdict​ ​and​ ​the​ ​actual​ ​damages​ ​award​ ​of​ ​$420​ ​million​ ​in​ ​our​ ​litigation​ ​against​ ​Papaya​ ​Gaming.​ ​Skillz​ ​proved​ ​at​ ​trial​ ​that​ ​Papaya​ ​used​ ​bots​ ​in​ ​its​ ​games,​ ​which​ ​is​ ​the​ ​issue​ ​at​ ​the​ ​core​ ​of​ ​Skillz’s​ ​claims​ ​around​ ​false​ ​advertising,​ ​deceptive​ ​trade​ ​practices​ ​and​ ​transparency​ ​in​ ​the​ ​skill-based​ ​gaming​ ​industry.​ ​Papaya​ ​conducted​ ​a​ ​multi-year​ ​campaign​ ​of​ ​fraud​ ​and​ ​false​ ​advertising​ ​that​ ​materially​ ​damaged​ ​Skillz​ ​and​ ​the​ ​skill-based​ ​gaming​ ​industry.

The court’s determination that Skillz’s business is not a gambling operation triggered a major market rally for Skillz shares, which climbed from around $3.50 to approximately $13 before settling back to their current price. This volatility resulted in a total value increase for Skillz of roughly $420,023,235.