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The 12 Biggest Poker Stories of 2014: #8 Advantage Gambling on Trial

Our countdown of the biggest poker and gambling stories of 2014 continues, and in this installment we have a gambling story involving baccarat and one of poker’s legendary and most popular players, Phil Ivey.

Ivey found himself at the center of a $20 million controversy that had nothing to do with Full Tilt Poker funds in 2014, and everything to do with hustling and casino incompetence.

The story is still unfolding, but here is what we know so far.

Advantage gambling or cheating?

The fine line between advantage gambling and cheating was put on trial this year, both in the court of public opinion and in the court of law, as poker pro Phil Ivey found himself wrapped up in two separate lawsuits over a baccarat tactic called edge-sorting.

The whole edge-sorting fiasco could very well have been the plotline to a Hangover sequel, considering the crazy circumstances that led to the tactic being employed. Basically, Phil Ivey cagily manipulated two separate casinos into negative EV situations by taking advantage of his penchant for high-stakes action and a design flaw in a line of Gemaco playing cards.

Under typical circumstances the design flaw would be unexploitable, even if the player was aware of it and could skillfully read the minor imperfection. But Ivey figured out a way to take full advantage of it.

Ivey, along with an edge-sorting specialist, was able to finagle a situation (by asking for special concessions sometimes granted to high-rollers) where the casino would rotate cards on the premise that Ivey was extremely superstitious and the casino would use a card shuffler in place of the typical baccarat protocol of dealer shuffling – as well as other special concessions. These stipulations allowed the backs of the cards to be read by Ivey’s accomplice, an expert in the tactic who has been banned from several casinos, which allowed the duo to identify high and low ranked cards – a major advantage in baccarat – and place their bets accordingly.

By most accounts, edge-sorting provided Ivey with a 5% edge over the house.

Ivey used this tactic at the Borgata in Atlantic City and at a Crockford’s casino in London. Both casinos took a beating at the hands of Ivey and his accomplice, Cheng Yin Sun, with Borgata losing about $10 million over four sessions, and Crockford’s losing in the neighborhood of $12 million in a single session.

Faced with two court dates and a potential $22 million bankroll swing, Ivey admitted to edge-sorting, deciding to use the defense that edge-sorting is a skill and therefore fair play. The casino could stop him from betting, but like card-counting, they would not be entitled to withhold his winnings.

For more on how Ivey and his accomplice carried this out, I recommend this column: Famed poker star Phil Ivey sued by Borgata for almost $10 million over alleged playing card scam.

Why the majority are on Ivey’s side

When the allegations came to light most people applauded Ivey, saying edge-sorting was simply advantage gambling and the casinos are acting like sore losers (here, and here). However, there were some that considered the tactic (and the well orchestrated setup of the “con”) an unfair advantage and a violation of the house rules.

In my opinion, part of the reason the vast majority come down on Ivey’s side is that his victims were casinos. Just like in Rainman or The Hangover or Oceans 11, people like to see the casinos lose, whether it’s due to a practiced card-counter or an out-and-out theft.

Many pointed out that the casinos offer unfair odds themselves, but I think this is a false equivalency as people knowingly gamble against those odds, whereas in Ivey’s case the casino was unaware the game was no longer being played at the stated odds offered at mini-baccarat.

That being said, even experts were firmly in the Phil Ivey camp, including people from casino security like Douglas Florence, who now acts as a consultant helping casinos identify cheaters and advantage gamblers. Florence, a former Security & Surveillance Director at multiple casinos, told me he didn’t think Ivey cheated: “… in the matter of Phil Ivey where second party is also alleged to be involved in the alleged cheating, the information they used to make their decision on the outcome of the game was available to any players that could have been on the game and the casino allowed the play.”

However, personal opinion, even that of experts, is not a judicial ruling and in the case that has been decided (Crockford’s) it seems the courts don’t agree. Ivey is appealing the ruling.

This shouldn’t be all that surprising considering, historically, the courts tend to favor casinos in these types of situations.

Possession is 9/10ths

Something I feel many people are overlooking is that there is a major difference between the two cases. At Crockford’s, the casino refused to pay Ivey, and only allowed him to walk away with his initial stake money. At the Borgata, the casino paid him and later sued him for the return of the money.

So in London it was Ivey suing the casino and in Atlantic City it’s the casino suing Ivey.

While this doesn’t change what took place in either situation, it will likely factor into the final decision as there is a certain finality to the transaction once the winnings are paid by the casino. In Crockford’s case the casino recognized something was amiss immediately following the session, whereas the Borgata didn’t feel there was anything fishy going on until much later, after Ivey had been paid.

Because of this, I think Ivey stands a much better chance in his court date with the Borgata, although the casino was quick to introduce the British court’s ruling in their own case. We’ll have to wait and see if I’m correct or not as the case is not expected to go before the court until the Summer of 2015.

 

 

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Steve Ruddock

Steve is veteran of the the poker industry, first as a player and now as a writer focusing mainly on the regulated U.S. markets and the politics of poker. Follow Steve on Twitter @SteveRuddock and at Google+.

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