Split Decision on Phil Ivey/Borgata Lawsuits

After hearing evidence from both parties in the complicated case, a judge in U. S. District Court has issued a split decision on the case involving poker professional Phil Ivey and the Borgata in Atlantic City. That split decision has left any final financial decisions completely up in the air as to which party will emerge victorious.

Per NorthJersey.com’s John Brennan, U. S. District Court Judge Noel Hillman issued a rather intriguing decision after months of legal wrangling between Ivey and the Borgata. The case dates to 2012 when Ivey, looking to play high stakes baccarat in Atlantic City, was able to get the casino to acquiesce to many of his requests for a game. Some of those requests were to have a singular eight deck shoe of cards (down to the brand, Gemaco Borgata) and a private playing area provided; that a dealer fluent in Mandarin Chinese act as the dealer; that the deck be shuffled after every hand and that Ivey be allowed to have a “companion,” Cheng Yin Sun, join him at the table. In each case, Ivey’s request was granted.

Over four different occasions, Ivey and Sun journeyed to Atlantic City and, while in action, Sun would speak to the dealer in Mandarin Chinese that Ivey would like cards turned in a particular manner, supposedly as a “superstition” of his. Once again, the dealer and the Borgata acquiesced to the request and play continued onward. Over the span of 107 hours of play and betting $50,000 per hand, Ivey and Sun racked up winnings of $9.6 million against the Borgata.

The problem came with payment. After the Borgata learned that Crockfords in the United Kingdom had also been visited by Ivey and Sun (the difference only being that, in London, Ivey and Sun were playing a baccarat variant, punto banco) and, after almost $12 million had been won by the duo, refused to pay out, the Borgata followed suit. This brought about the legal action from Ivey, who claimed to have committed no infraction and won the money legitimately, and a countersuit from the Borgata claiming malfeasance.

In the discovery and interview process, it was determined that Ivey and Sun were utilizing “edge sorting,” or a method of identifying cards because they were miscut at the factory (well explained by my colleague and friend Dan Katz here). In Ivey’s opinion, the usage of such a technique was an “advantage” play, or a shifting of the odds from the casino’s favor to his (much like card counting in blackjack, another legal move that is frowned upon by the casinos). The Borgata countered that Ivey and Sun deceived the casino and its personnel and that, in fact, the usage of edge sorting was illegal.

Judge Hillman saw merit in each side’s arguments and adjudicated them accordingly. As to the Borgata’s contention that Ivey and Sun used an illegal means to win, Hillman said no. “To meet the elements of fraud, the Borgata must show that Ivey and Sun made a material misrepresentation and that the Borgata relied upon that misrepresentation to its detriment,” Hillman wrote. In his opinion the Borgata, through granting the requests that Ivey asked for, “trusted Ivey” and tried to “profit at (his) expense (as Ivey was trying to do against the casino).”

Ivey didn’t escape Judge Hillman’s gaze, however. Hillman determined that the usage of the “edge sorting” technique employed by Ivey and Sun – and the turning of the cards by the dealer so that they could be identified – “led the cards to be ‘marked’ even though neither player ever touched the cards themselves.” Hillman wrote. In stating that Ivey and Sun’s contentions that they weren’t “marking” the cards per se, Hillman determined that Ivey and Sun’s idea of a “marked” card “is too narrow. 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 as set forth by the (New Jersey) CCA (Casino Control Act).”

On the Ivey case, Hillman sided with all the claims presented except for breach of contract and, as to the Borgata countersuit, found in favor of the breach of contract claim but tossed all other actions. Hillman also set a firm, 20-day window that the Borgata will submit briefs requesting damages from Ivey and Sun’s breach of contract and, 20 days after that, Ivey and Sun will respond to that submission.

The split decision is perhaps a way for Hillman to force the two parties back to the negotiating table to hammer out a settlement in the case. As it sits now, it is possible that there will be a resolution of all the actions regarding the 2012 Ivey/Borgata case by the end of this year.