Its problems tell us something too.
Papaya Gaming has become one of the most interesting businesses in skill-based gaming, although perhaps not entirely for the reasons it would have chosen.
The company took a relatively small number of familiar casual games, including Solitaire, Bingo and Bubble Shooter, and allowed people to compete for real stakes. It proved extremely successful. Papaya is privately owned and does not publish detailed financial results, but its revenues have been widely estimated at around $700 million a year, or close to $2 million a day.
Its own figures give some idea of the scale: Solitaire Cash has been downloaded more than 32 million times, while Bubble Cash and Bingo Cash have each passed 15 million.
Papaya is also part of a much bigger market. Recent research estimates that skill gaming was worth around $50 billion globally in 2025 and is growing at approximately 15% a year. Whatever view you take of what happened subsequently at Papaya, those numbers are hard to ignore. There is clearly a substantial appetite for games in which people can test their ability against other players for real stakes.
For video game publishers, that is the first interesting part of the Papaya story. The second is what happened when the model came under scrutiny.
The problems with a closed system
In April 2026, a US federal jury found Papaya liable for false advertising in a case brought by competitor Skillz and awarded $420 million in damages. The position became more serious in July, when the judge ordered Papaya to disgorge $719 million in profits instead of the jury award, together with around $10 million in legal fees. Papaya is appealing and has begun protective restructuring proceedings while that appeal takes place.
The case centred on Papaya’s historical use of bots in tournaments where players believed they were competing against other people. This is no longer simply an allegation. Papaya does not contest that it used undisclosed bots in its real-money games until late 2023 or early 2024, although it says that it does not use them today.
The scale of their use was significant. Evidence considered by the court showed that more than half of all participants over the period examined were bots and that, for long periods, most cash tournaments included them. There was also evidence about what Papaya called “Tailored Sessions”, in which one human player competed against bots and the system could determine where that player finished by assigning them to a particular tournament.
The obvious question is why a successful gaming company would take that risk. Part of the answer lies in a fairly mundane problem faced by any competition platform: you need enough people to compete against each other.
Papaya’s tournaments required players of suitable ability to be available at the right time and willing to compete for the appropriate stake. If there weren’t enough of them, tournaments took longer to fill or didn’t happen at all. Bots provided liquidity, filling empty places and allowing more games to go ahead. The problem was compounded by the structure of the business.
Papaya developed the games, attracted the players, organised the tournaments, controlled the matchmaking and operated the competition platform. It therefore had a commercial interest in keeping as many tournaments running as possible, while also controlling who or what took part in them. That does not mean that every closed gaming platform will encounter the same problem. It does mean that the Papaya case has exposed a potential conflict which anyone thinking seriously about real-money skill gaming needs to address.
Why Sbarter has taken a different approach
Sbarter starts from a different model. It does not develop the games and it does not own a closed community of players. Instead, it provides the infrastructure through which players from existing gaming communities can compete against one another for real stakes.
The distinction matters. The publisher continues to own and operate its game and its relationship with its players. Sbarter provides the competition layer, together with the infrastructure needed to create, verify and settle contests. It is not simultaneously the game developer, tournament operator, owner of the player community and referee.
This also explains some of the technology behind Sbarter. Blockchain is sometimes treated as the point of a product in itself. For Sbarter, it has a much more practical purpose. If people are putting real value at stake, they should not have to rely entirely on the operator’s assurance that the competition worked as promised.
Entry fees are locked when a contest begins, outcomes are recorded and rewards are distributed according to rules established in advance. Transactions settle on a public blockchain, creating a record that can be independently checked. KYC and player verification perform a similarly practical role by establishing that people competing for real stakes are who they claim to be.
None of this was introduced in response to the Papaya case. Sbarter was designed this way because trust, verification, liquidity and the potential conflicts within closed competition systems were obvious issues that had to be addressed if skill-based competition for real stakes was going to work across different games and communities.
What this means for publishers
It built a business reportedly generating around $700 million a year from a handful of games, in a market that is already large and expanding quickly. There is no need to make a theoretical case that consumers might be interested in this kind of competition. Millions of them already are.
The question for publishers is how they participate without having to build an entirely separate competition business themselves. Sbarter is designed to provide that infrastructure across games from different publishers, allowing them to retain control of their games and player relationships while giving those players the option to compete for real stakes.
There is a direct commercial benefit as well. Publishers that provide verified game- result data to Sbarter receive an oracle fee for contests played using their games. An established game and community can therefore create an additional revenue stream without the publisher having to develop the payments, verification and competition infrastructure around it.
This is why Papaya is relevant to Sbarter beyond the immediate headlines surrounding the court case. It has demonstrated that the market for skill-based gaming involving real stakes is already large and commercially attractive. At the same time, its experience has exposed some of the weaknesses that can emerge when the entire competition sits inside a closed system controlled by one operator. For publishers considering the opportunity, both parts of the story are useful. Papaya has shown what can be built. The subsequent court case has provided a fairly stark illustration of why the way it is built matters.
Note: References to Papaya Gaming and related legal proceedings are based on publicly available information. Papaya is appealing the US judgment and the legal process remains ongoing. Papaya acknowledges historical bot use but states that it does not currently use bots in its competitions. Third-party financial and market figures are drawn from public reporting and market research and have not been independently verified by Association Sbarter.
