Phil Ivey calls himself the Michael Jordan of Poker and is a well-known and much-admired high stakes poker player. But now two lawsuits he is involved in may hurt his reputation and may cause him to be banned from some casinos. Last week, the Borgata Casino Hotel, Atlantic City New Jersey’s most popular and successful betting palace, filed a federal lawsuit seeking to recoup approximately $9.6 Million Ivey won while playing Baccarat during four trips to the Borgata in 2012.
The lawsuit claims that Ivey took advantage of a manufacturing error in sets of cards made by card-maker Gemaco (also named in the suit). It seems the purple version of the Gemaco cards featured a slightly wider left-hand edge than right hand edge; in its contract with the Borgata Gemaco promises that all cards will be perfectly symmetrical. Somehow Ivey picked up on this defect and then used his leverage as a high-stakes player to manipulate the game of Baccarat.
Baccarat is game preferred by high rollers and casino regulars. It is also highly popular among Asian players and it is not unusual for players to have particular “superstitions” about how the cards are handled and dealt. In certain Asian casinos,for example players are allowed to hold and even tear the cards for good luck since a new deck is used every hand. The game is played with two hands of two cards being dealt: one is called the “banker’s hand” and the other is called the “player’s hand.” Ace through nine are worth their face value (Ace being one) and 10, Jack , Queen and King are all worth zero. The goal is to get as close to 9 as possible. Going over does not “bust” you. Table players bet on whether the banker or player hand will be better; you can also bet that they will tie, though that is the riskiest bet with also the greatest reward. The player hand is dealt first so if you could know the value of the first player card you will have a tremendous advantage. If the player hand is dealt a 7,8 or 9, it is much more likely this hand will have be closer to 9 than the banker hand.
To set up this advantage Ivey sent a set of strict instructions to the Borgata in beginning in the summer of 2012: The cards used had to be purple Gemacos; an automatic dealing machine (called a “shoe”) had to be employed instead of the traditional hand-dealer employed at high-end Baccarat tables; he wanted a private secluded playing pit; since he was to be accompanied by his friend Cheng Sun (also sued) the dealer had to speak fluent Mandarin; he wanted to play $25,00 per hand as a maximum bet; and he wanted to risk up to $1 million. The casino said they would be glad to comply and Ivey wired his $1 Million stake to the casino. Once there, Mr. Sun began to tell the dealer (in Mandarin) that he was superstitious and wanted him to invert the “good cards” (7,8,9) once they were shown. That meant the fat edge wold be on the right in good cards and the skinny edge on the right for all other cards. While this manipulation was going on , Ivey placed minimum bets. Once all the decks in play had been set up per Mr. Sun’s instructions, the lawsuit alleges, Ivey began playing maximum bets. The use of the shoe guaranteed that the orientation of the cards remained the same.
Using this system, according to the casino, Ivey increased his likelihood of winning by about 600%; he would bet on “player” when that hand got a “good” card and on “banker” when it did not. This little bit of extra knowledge allowed him to win $2.4 million in April; $1.6 million in May; $4.8 million in July and $825,000 in October of 2012. In July, he increased the max bet to $50,000 and his stake to $3 Million. Why the relatively low win in October? Beause in that month, he sued Crockford’s Casino in London for allegedly withholding 7.8 Million Pounds Ivey won playing Baccarat until they discovered how he had gamed the casino. Crockford’s sent out a bulletin to all casinos about the lawsuit in which IVEY detailed exactly how he did it; he argued he merely used an error to his advantage and that is not “Cheating” or “Marking the cards.” When the Borgata received the Crockford’s memo, its Executive Vice President walked down to the private Baccarat pit and confronted Ivey. Ivey said that Crockford’s had no right to withhold the money and that the allegations he was cheating were baseless. The casino let him play on -presumably due to his celebrity status. The Borgata alleges that at that point Ivey was up over $3 Million but then suddenly after being confronted he began to lose precipitously – the casino alleges he was losing intentionally.
After examining the videotapes and talking to the dealers involved and after reviewing in detail the Crockford’s lawsuit, the Borgata sued to get its $9.6 million back. But is it cheating? The court will have to determine how it defines tha tterm and how it defines “marking cards.” I say “Yes, it is cheating.” Had Ivey just caught an error and taken advantage of it at the table would be one thing, but to send a specific set of instructions to the casino in order to rig the game in your favor is cheating – and specifically orienting the cards to allow them to be identified is the very definition of “marking.” While it is true that the casino has the tremendous advantage in most cases, by not paying out what the true odds of a winning hand call for, when you sit at the table you agree to those terms. Knowledge of all the rules, odds and game idiosyncrasies is part of the contract between you and the casino.
So I think Mr. Ivey will lose his lawsuit here in the States. Whether these allegations will hurt or enhance his standing in the gambling community remains to be seen.