Phil Ivey Ordered to Pay $10.1 Million in Borgata Edge Sorting Case
Professional poker player Phil Ivey lost his edge sorting lawsuit with Borgata and a judge has ordered him and his baccarat partner to pay $10.1 million to Borgata. The lawsuit stems from a 4-month period in 2012 when Phil Ivey and a friend, “Kelly” Cheng Yin Sun, won $9.6 million from the Borgata at the high roller baccarat tables.
The award represents the $9.6 million Ivey and Sun won at the baccarat tables, along with the $504 thousand Ivey won playing craps with his baccarat winnings. US District Judge Noel Hillman said the two violated provisions of the Casino Control Act.
Played with Marked Cards
The court ruled that the two players violated a prohibition against playing with marked cards. Judge Hillman said in his ruling, “By using cards they caused to be maneuvered in order to identify their value only to them, Ivey and Sun adjusted the odds of baccarat in their favor. This is in complete contravention of the fundamental purpose of legalized gambling.”
The two did not mark the cards themselves, but instead requested that a faulty deck of purple Gemaco cards be used. Not only did Phil Ivey use his status as a high roller to receive the Gemaco cards, but he also called for Borgata to supply a Chinese language dealer and the right to sort the cards according to their whims. When this was granted, Cheng Yin Sun gave the dealer instructions on how to sort the cards.
Because Gemaco purple cards had been misprinted, the backside of the high cards in the deck were slightly skewed. Someone with a keen eye could tell the different between high cards and low cards, allowing someone with knowledge of baccarat and a good mind to arrange the cards in a way advantageous for a bettor.
Phil Ivey Was Edge Sorting
The technique is called “edge sorting”. While it is not illegal per se, New Jersey state laws make it illegal to play under false pretenses. Phil Ivey and Ms. Sun could not know they were going to win any given hand, but the odds were stacked in their favor through edge sorting.
Ivey and his partner won several million dollars in late-spring 2012 while playing $50,000-a-hand baccarat at Borgata. The casino eventually lured the two back to the casino in August 2012 with promises of $100,000-a-hand baccarat, assuming the house edge would allow Borgata to win back some or all of its losses.
Later Sessions of Baccarat
Phil Ivey readily accepted the invitation, allowing him and his partner to win even more money from Borgata. The two fooled Borgata for a couple of years, until Ivey filed a lawsuit against the London casino, Crockfords, for £7.6 million. That tipped off Borgata that edge sorting had taken place during the 2012 session, so the Atlantic City casino filed a lawsuit to retrieve its money.
While on stand during the trial, Phil Ivey pointed out that he was still gambling. He pointed out that the pair lost $2.7 million during one of the two sessions “in a matter of minutes“, because edge sorting only tips the odds in the player’s favor — it does not assure wins.
Ivey said on the stand, “We gamble regardless, because I can’t be accurate all the time.”
Judge Hillman’s Decision
The judge ruled that gambling with an advantage was not enough; the Casino Control Act stipulated that the house should be allowed to set an advantage, for the sake of staying in business and providing continuing entertainment to players.
Judge Hillman rejected Borgata’s request of a $15.5 million settlement. Borgata argued that was the amount the two could have been assumed to lose over that many sessions of baccarat. The judge thought that amount was too excessive, and determined the two sides should be satisfied with the amount with which they began the sessions.
Borgata’s VIP Treatment
The court did add one penalty on top of the amount to be returned. Hillman required Ivey and Sun to repay $249,199 in comps they received from the Borgata. This was promotional money spent by Borgata on their VIP clients, so the judge viewed the money spent as something which is reasonable for Ivey to pay back the Atlantic City casino.
The two judgements represent over $18 million in American dollars won at the baccarat table which was lost by Phil Ivey and his playing partner in court. Casinos are big taxpayers, so lawmakers write laws which favor these important businesses — at least when it comes to questions between players and the house. From the state’s perspective, a casino must be able to depend on its house edge, or the business will collapse.
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