"fair and skill-based" may falsely imply absence of bots in online gaming

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2024 WL 3526853, No. 24cvl646(DLC) (S.D.N.Y. Jul. 23, 2024)

Skillz sued its competitor in mobile gaming, Papaya, for violating federal and NY law against false advertising by falsely advertising that its games pit human players against each other when in fact Papaya uses bots masquerading as human players.

Skillz alleged that its platform matches users with similar skill levels in one-to-one tournaments. Skillz does not use artificial competitors, i.e., “bots”, in its cash competitions. Like Skills, Papaya allegedly offers cash competitions in which players are matched by their skill level; unlike Skillz, Papaya hosts competitions with up to twenty players.

Papaya allegedly advertises that players will “be matched with other players within the same skill level ... so the game is totally fair and skill-based.” Also: Papaya “make[s] sure to match players against other opponents with a similar skill level to ensure a fun and fair experience for everyone.” It allegedly advertises that its cash tournaments are available “to all players over the age of 18.” In its Terms of Use, Papaya states that the “individuals who better use their relevant skill and knowledge and accumulate the highest scores will be the winner(s).” However, unlike Skillz, Papaya allegedly does not provide a function to allow players to chat with each other or give access to a competitor’s gaming history. Reviews have complained that Papaya uses bots to play against them.

The complaint sufficiently alleged implied falsity. References to “players”, “individuals”, “winners”, “fair” and “skill-based” “may be found by a jury to imply that Papaya’s games of competition are conducted among human players only and not among humans and bots.” Explicit “no bots” statements weren’t required for implied falsity. Also, it doesn’t matter that using bots wouldn’t necessarily make the games unfair. “The issue is not whether bots have been unfairly employed but whether consumers were misled about the presence of bots in the game.”

The complaint plausibly alleged materiality, because humans v. bots was a “material quality” of the platform, and the negative online reviews complaining about bots reinforced materiality, whether or not they were admissible at trial.

And the complaint plausibly alleged injury, because it alleged that, in this online gaming world, players are not likely to switch between platforms once they have decided on which to join. “Instead, they are motivated to build up in-game rewards and accomplishments on a single platform. Accordingly, when players have joined Papaya because of its false advertising, these players are often lost to its competitors.” Even if its damages are difficult to quantify, Skillz could still obtain injunctive relief and disgorgement.

The NY GBL claim survived for similar reasons.