(Bloomberg) -- Kayla, 39, had always been a good at solitaire. So in 2022 she answered a Facebook ad for AviaGames’ Solitaire Clash and began competing online for cash prizes.
Over 16 months the Washington state resident lost $22,000 in tournaments, according to bank statements reviewed by Bloomberg. Then she learned her opponents may have been robots, not real people.
“I got into a mindset where I’d eventually recoup that money,” said Kayla, who asked that her last name be withheld for privacy reasons. “It never happened. It was basically the company winning the money.”
Five lawsuits accuse three of the largest operators of competitive mobile-game tournaments of cheating — tipping the odds by pitting customers against computers, not other humans as advertised. Three of the cases have been brought by Skillz Inc., a pioneer in the business that says its rivals don’t play fair.
Kayla, while not involved in any of the cases, joins a growing community of people complaining about a billion-dollar mobile gaming sector in which players vie for cash prizes in tournaments featuring modified versions of solitaire, bingo or blackjack.
“It’s so lucrative to do this that it needs to be dealt with at a systemic level,” Skillz’s co-founder and chief executive officer, Andrew Paradise, said in an interview. “They just keep robbing players.”
The online tournaments exist largely outside of the regulated world of gambling. The companies say these are games of skill not luck, and as a result they largely escape regulation.
Officials in the casino industry, without calling out specific companies, say some operators exist in a murky area somewhere between play and gambling.
“These games are examples of emerging threats online intentionally designed to circumvent or exploit ambiguity in state gambling laws and the regulatory frameworks,” said Joe Maloney, a spokesman for the American Gaming Association. Such games, he said, place “consumers at significant risk” and prevent local governments from “realizing a revenue opportunity for their residents.”
In 2023, Avia said it had paid out over $1.4 billion in prizes to gamers. The closely held company doesn’t disclose players’ losses or its own revenue. Solitaire Clash is the No. 1 casino-style game in Apple Inc.’s App Store.
Skillz, which has lost business to the newer rivals, sued Avia and two other companies, Papaya and Voodoo, accusing them of stealing its market share and profit in part by cheating players.
Both Avia, headquartered in California, and Tel Aviv-based Papaya deny players are competing against bots and say their games are thriving based on their appeal. Papaya is “absolutely committed to fair and enjoyable skills-based mobile gaming that rewards the abilities of our players,” a spokesperson said.
Voodoo, which is based in France, didn’t respond to a request for comment.
Players have also filed class-action suits against Avia and Papaya, alleging that they lost hundreds or even thousands of dollars that they would not have spent if they had known bots were present. The suits suggest there are millions of potential class members.
One plaintiff, who asked to remain anonymous, said in an interview that she spent over $240,000 on Solitaire Clash, a figure that matches bank records reviewed by Bloomberg. In order to play, she pulled money from her retirement plan. She stopped when she saw the allegations about bots.
In the class-action complaints, the plaintiffs seek monetary damages and halt to the alleged activities, including the use of bots.
Skillz, founded in 2012, was an early leader in the tournament game business. The company had signed partnerships with over 1,100 studios to launch 550 games. One early hit was 2016’s Solitaire Cube, followed by 21 Blitz in 2018.
Two years after Solitaire Cube made its debut, Papaya came out with Solitaire Cash. That was followed by Avia’s Solitaire Clash. Today, Avia and Papaya have most of the top games in the App Store’s casino-gaming category.
Skillz’s sales last year fell 44% to $150.1 million after peaking at $384 million in 2021. Shares of the company, which went public in 2020, traded at more than $900 in early 2021 before plummeting to the current price of $6.63. In addition to losing ground to rivals, the company was also hurt by changes in Apple’s privacy policies, which have made it harder to attract players.
In one of the suits, Skillz accuses Avia of stealing some of its game technology. In May, the company received $50 million from Avia to settle patent infringement claims. In that case, Skillz aired allegations that players at Avia were vying against bots. Earlier, in November, Skillz told the court in California that it had received a federal grand jury subpoena seeking information on Avia.
The US Attorney’s Office in Newark, New Jersey, declined to comment. Avia didn’t comment on the federal inquiry.
Paradise said in the interview that his competitors’ games aren’t necessarily better. He alleges players using their apps have an easier time getting underway because they’re quickly matched against a computer, while his customers sometimes have to wait to be paired with humans.
To prove his theory, Skillz commissioned a market research firm to enlist 55 gamers to play Avia’s Solitaire Clash. They logged in at 1 a.m. on a Friday, when fewer players are active, making it a near certainty that some would be playing each other.
But the players never matched with each other, with Paradise contending in the interview that the test proves his competitor is using bots.
Later, through discovery, Skillz obtained documents in which Avia employees allegedly spoke openly about the robots. Some referred to them as “cucumbers,” with one saying a player once encountered five “cucumbers” in succession.
“If you have five people, and four of them are bots, you can actually pick if a person wins $5,000, $3,000 or nothing,” the Skillz CEO said in the interview.
©2024 Bloomberg L.P.
