Phil Ivey Vs Casino

Borgata Casino: The Multimillion-Dollar Marathon Court Game Continues The $10 millon 'edge sorting' case pitting Phil Ivey against Borgata stretches on — and fits the profile of a case that won't be ending soon. A poker champion has lost a lawsuit against a London casino that refused to pay him millions in winnings because it said he had cheated, in a ruling that overturns 35 years of legal practice on.

By the looks of things, Phil Ivey and the Borgata Hotel and Casino in Atlantic City are nowhere near done with each other. The edge-sorting real-life court drama is the saga that keeps on giving.

In early September, Ivey filed an appeal to prevent Borgata from immediately collecting on its $10 million judgment.

Not to be outdone, Borgata cross-appealed last week, asking the court to review every ruling in the case that went against the Atlantic City casino.

Borgata’s legal team admits the appeals are not likely to change the rulings in effect. A schedule for the appeal hearing is not known. Borgata can continue to attempt to collect the award until a reversal of the decision — if it comes.

A look back at Borgata vs. Ivey

Borgata filed court documents in 2014 seeking restitution from Ivey alleging he and his partner defrauded the casino.

Borgata went so far as to claim Ivey and his partner, Cheng Yin “Kelly” Sun, participated in a RICO operation at the state and federal level. The casino tried to convince the court the duo purposefully used edge-sorting to take financial advantage of the popular AC destination. Borgata asked for $30 million from the poker pro.

US district court judge Noel Hillman found in favor of the casino but not for fraudulent behavior. Instead, Hillman found Ivey violated the Casino Control Act that ensures a fair game for both parties by using employing edge-sorting to his advantage.

“Ivey and Sun, and perhaps others view their actions to be akin to cunning, but not rule-breaking, maneuvers performed in many games. Even though Ivey and Sun’s cunning and skill did not break the rules of baccarat, what sets Ivey and Sun’s actions apart from deceitful maneuvers in other games is that those maneuvers broke the rules of gambling as defined in this state.”

The award of $10.1 million to the Borgata, in essence, returned the assets of each party back to where they were before the baccaratplaying spree.

Initially, the court ruled Borgata could start collecting immediately. Ivey contended it will do “irreparable harm” to his business and filed the appeal to stop collections.

What is edge-sorting (and why it’s wrong)?

Edge-sorting is a skill that allows someone to determine the value of the card while it is face down.

During the manufacturing of the cards, they are cut in such a way that the pattern on the back of the cards is not uniform. For example, one edge might have a larger portion of a shape than another.

However, that alone isn’t enough to give a player a huge advantage in baccarat. The player has to manipulate the dealer into sorting the cards to ensure the high-value cards face one way and low-value cards face the other. The sorting of cards allows the player to determine what cards are coming before the card leaves the shoe.

In Ivey and Sun’s case, their requests for a certain brand of cards, asking the dealer to turn the cards a certain way, and keeping the same deck amounts to something similar to card counting in blackjack.

It’s not illegal, but it does not constitute a fair game.

Ivey returns to tournament poker

Ivey was conspicuously absent from the poker tournament circuit for quite some time. Earlier this year, he made an appearance at Triton Super High Roller Series in Montenegro.

Living up to his reputation as one of the best poker professionals of all time, he wins a short deck title right out of the gate. It’s been two years since he racked up an official tournament cash.

After Montenegro, Ivey turned up in the Nevada desert. He spent the summer playing several events at the World Series of Poker.

Phil Ivey Vs Casino

So far this year, Ivey has racked up $2.4 million in tournament earnings. Ivey can’t enter a poker tournament without the media reporting on his every move.

The amount he won over just two tournament series is a quarter of what he owes Borgata. He might be hard-pressed to convince a judge that paying back the casino will be a “hardship” to his business.

28.07.18

Last year's Supreme Court judgment in Ivey v Genting Casinos [2017] UKSC 67, a civil claim, shocked many criminal law practitioners as it formulated a new test for determining the element of ‘dishonesty’ for use in both civil and criminal Proceedings.

Prior to Ivey the case of R v Ghosh [1982] EWCA Crim 2 had been widely recognised by judges when directing juries on determining whether ‘dishonesty’ was established (in cases where it is a requisite element such as theft and fraud). The 'Ghosh Test' laid down a two-part test which required juries to consider:-

1. Whether the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people; (the 'objective test') and, if yes,
2. Whether the defendant must have realised that ordinary honest people would so regard his behaviour ('the subjective test').

In order to find a defendant guilty, a jury would have to be sure beyond reasonable doubt that the answer to both questions was yes.

In Ivey the Supreme Court Justices held that the second question in the Ghosh Test (i.e. the subjective test) did ‘not correctly represent the law and that directions based upon it ought no longer to be given by judges to juries’.

Ivey concerned a claim brought by Phil Ivey, a professional poker player, against Genting Casinos. The casino had refused to pay him his winnings of £7.7million because they said he had cheated. Mr Ivey used a technique called ‘edge-sorting’ where he would observe the unintentional differences on the backs of some types of card and then manipulate the placement of high value cards in the 'shoe'. He did this by asking the croupier to place certain cards in a different direction, ostensibly on the grounds of superstition. The croupier humoured him, acceding to his request because he was a known and valued high-stakes player.

The parties agreed that a contract for betting included an implied term that neither party would cheat. Mr Ivey argued that ‘cheating’ required an element of dishonesty, which he said the casino had not established. We reported on the 2014 High Court first instance decision here. Mr Justice Mitting concluded that Mr Ivey was cheating and found against him. The Court of Appeal agreed. Mr Ivey appealed to the Supreme Court

In determining whether Mr Ivey was cheating the Supreme Court stepped back and considered the wider definition of dishonesty. The new test removes the requirement that ‘the defendant must appreciate that what he has done is, by those standards, dishonest’.

The Court held that they:-

• ‘must first ascertain (subjectively) the actual state of the individual's knowledge or belief as to the facts. The reasonableness or otherwise of his belief may evidence whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held.’

Once that had been established they:-

• must determine ‘whether his conduct was dishonest by applying the objective standards of ordinary decent people. It is not necessary for the individual to appreciate that what he has done is, by those standards, dishonest.’

The Court summarised its concerns with the Ghosh Test in its press summary, '...the second leg of the rule adopted in Ghosh has serious problems. The principal objection is that the less a defendant’s standards conform to society’s expectations, the less likely they are to be held criminally responsible for their behaviour. The law should not excuse those who make a mistake about contemporary standards of honesty, a purpose of the criminal law is to set acceptable standards of behaviour.'

Phil Ivey Vs Casinos

Applying its interpretation to Mr Ivey's case, the Supreme Court held that if cheating at gambling required an additional legal element of dishonesty, that it had been satisfied in his case. Accordingly, the appeal was dismissed.

A full copy of the judgment can be found here and a video of the judgment summary can be found below:-

[embed]https://www.youtube.com/watch?v=fixGhSsfl-Y[/embed]

The effect of the decision in Ivy is profound, particularly in criminal law where defendants may now struggle to avoid criminal liability based on their own personal perception of dishonesty. Whilst this decision is significant in this regard, it brings dishonesty offences more in line with the mens rea requirements of many other criminal offences.

Visit our website to see how Brett Wilson solicitors can assist you with civil fraud claims or defending criminal investigations/prosecutions.

Legal Disclaimer

Articles are intended as an introduction to the topic and do not constitute legal advice.