Nine-Time Poker Champ Accused Of “Edge Sorting” To Win Millions

220px-Phil_Ivey_Profile220px-Baccara_PaletteThere is an unfolding scandal involving one of the best known gamblers in the world, Phillip Ivey, Jr. who has been accused of card-cheating in baccarat to the tune of $9.6 million. What is striking to me is how such allegations are treated as civil rather than criminal matters, particularly given the allegations by Borgata Hotel Casino & Spa filed in its federal lawsuit against Ivey in using effectively marked cards. The casino reads like a new script for Ocean’s Thirteen with the use of flawed dice created at a Mexican factory. I could find no reference to the lawsuit (or another lawsuit by the Golden Nugget) on Ivey’s website.

Borgata alleges that Ivey used a defect in cards made by Kansas City card manufacturer, Gemaco Inc., that allowed him to engineer good cards to be dealt in a way to predictably win at baccarat. (Gemaco Inc. is also being sued, including a lawsuit by the Golden Nugget that alleges that the company provided unshuffled cards that allowed gamblers to beat the casino for $1.5 million) The casino details four games in April and October 2012 and what it alleges was “edge sorting” in violation of casino rules and gambling regulations. This was allegedly done by using a defect in the pattern on the back of the cards. The cards have rows of small white circles that are meant to look like the tops of cut diamonds, but some of them allegedly were only a half diamond or a quarter of one.

The complaint is an insight into card cheating. It claims that Ivey and an associate told the instructor to flip the cards in a particular way depending on whether the card was desirable or undesirable. The former are cards numbered 6-9. This allowed the good cards to be arranged in a way that allegedly allowed the irregular side to be facing in a specific direction when they came out of the chute. In addition the casino says that Ivey insisted on an automatic shuffling machine so that the alignment would not change.

What I find fascinating is that a person can allegedly cheat at cards to secure millions but it is not considered a crime. If you steal chips from a table, you are criminally charged. However, Ivey is accused of violation gambling rules and regulations to secure a windfall of ill-gotten gains. While some would say that he was merely exploiting cards dealt by the casino like any good gambler, gambling regulations do not view such techniques in that way. New Jersey has a typical provision:

5:12-113. Swindling and cheating; penalties.

113. Swindling and Cheating; Penalties.

a. A person is guilty of swindling and cheating if the person purposely or knowingly by any trick or sleight of hand performance or by a fraud or fraudulent scheme, cards, dice or device, for himself or herself or for another, wins or attempts to win money or property or a representative of either or reduces a losing wager or attempts to reduce a losing wager in connection to casino gaming.

b. Consolidation of offenses. Conduct denominated swindling and cheating in this section constitutes a single offense, but each episode or transaction may be the subject of a separate prosecution and conviction. A charge of swindling and cheating may be supported by evidence that it was committed in any manner that would be swindling and cheating under this section, notwithstanding the specification of a different manner in the indictment or accusation, subject only to the power of the court to ensure a fair trial by granting a bill of particulars, discovery, continuance, or other appropriate relief when the conduct of the defense would be prejudiced by a lack of fair notice or by surprise.

c. Grading of swindling and cheating offenses.

(1) Swindling and cheating constitutes a crime of the second degree if the amount involved is $75,000 or more.

(2) Swindling and cheating constitutes a crime of the third degree if the amount involved exceeds $500.

(3) Swindling and cheating constitutes a crime of the fourth degree if the amount involved is at least $200 but not more than $500.

(4) Swindling and cheating constitutes a disorderly persons offense if the amount involved is less than $200.

(5) The amount involved in swindling and cheating shall be determined by the trier of fact. Amounts involved in acts of swindling and cheating committed pursuant to one scheme or course of conduct, whether from the same person or several persons, may be aggregated in determining the grade of the offense.

This is why I find it so odd not to see any criminal or regulatory charges if these allegations have merit. It apparently is not considered a form of fraud or con game if the alleged victim is a casino. Perhaps one of our gamblers can enlighten us.

Borgata is suiting the lawsuit but failed to properly allege details in the complaint as noted by U.S. District Court Judge Noel Hillman. They have until April 24, 2014 to correct the errors.

43 thoughts on “Nine-Time Poker Champ Accused Of “Edge Sorting” To Win Millions

  1. Edge sorting? Sounds to me like the guy grabbed a natural opportunity that was GIVEN to him by the house. I say stop whining about it and learn from the mistake.

  2. I agree with NYARw.

    Go into a casino – they set all the rules (some would argue that the gaming commissions are in their pockets), are the most knowledgeable gamblers out there, and selected/purchased the raw materials. (the cards).

    More, they have the ability to expel any gambler for any reason.

    If they can’t win with those advantages, then more fool them.

  3. NYARw – that is the claim that Ivy has been making all along. He noticed something wrong with the cards that gave him and edge and took advantage of it. This contretemps has been going on for some time. They are sore losers and do not want to pay up.

  4. The burden of proof is lower in civil court. It’s a “preponderance of the evidence” standard, and not “beyond a reasonable doubt” basically.

    I do not know if NJ Gaming has an open investigation though.

    So the casino may be concurrently pursuing a civil remedy as they await results of the gaming commission investigation.

  5. Edge sorting has been around for ages, The casino used an inferior product, didn’t check the cards for defects and their staff didn’t have the brains to stop the game. So they’re going after the player that picked up on the flaw in the cards. They don’t want to pay Mr. Ivey what he won and yet they’re going after the manufacturer of the cards. It used to be If you counted cards when playing blackjack you would be banned from playing blackjack at certain casinos for playing at the best of your ability. What a bunch of crybabies.

  6. Um, the people posting above me do not seem to have read the post.

    If what our host has written in correct, the casino is claiming that the player had access to the cards ahead of time and got an accomplice to arrange the cards in such a way as to indicate their value (to a degree).

    It seems that the casino could have gotten around this conspiracy (for example by insisting on a legit shuffle). But still, the allegation is more than just looking at the backs of the cards.

  7. Dan; your saying the casino let him inspect the cards before the game? And who was the accomplice, the dealer who works for the casino

  8. I am a gambler and the casino “policies” vary from casino to casino. There are “whales” who bet 100k a hand. In blackjack for instance, they will work out rules where they play @ a table by themselves. The casino will give them 50k up front. The casino will rebate 20% of their losses. They will allow the player to require the dealer to stay on soft 17[Ace and 6], a big advantage the house has. They will allow the whale to dictate the way the dealer dispenses cards and the pace. Again, this is all for big hitters. They in turn are required to bet certain amounts per day.

    This guy is obviously a whale and had some of the aforementioned advantages negotiated. It turned out those advantages were supplemented by an advantage the casino was not aware of. Nothing criminal. Counting cards is not criminal. But, casinos have a right to refuse service to anyone. There are some things that are criminal. Having a mirror that allows you to see the dealers hand. Having a device to manipulate the dice. Having computer assisted wands that rig slots. And, in Nevada anyway their are draconian laws for this group. There are men doing 40-50 year sentences for multiple offenses in Nevada prisons.

  9. Wav, There is no way a flaw like this is an advantage to the casino. That’s corroborated by the card manufacturer being a defendant. Casinos don’t cheat. They don’t have to. They have the odds. But, odds play out over time. The thing that a casino hates most is if you come in, hit it big quickly, and then leave. When that occurs, I cash in every time and every time the craps, blackjack dealer, the pit boss, try and get you to stay. You got a MUCH fairer game in a casino than you do on Wall Street, or the track, or jai lai fronton. Every game in the casino has the odds in their favor. The best odds for a player are baccarat, blackjack, craps in that order. The worst are those big wheels. I feel like slapping folks upside the head when they play those big wheels.

  10. Is it possible that the casino is only pursuing civil remediation because they don’t want to offend or scare off the whales that Nick is referring to? Jail is quite a different threat than “give me back my money”.

  11. Jason, You are correct, whales are where casino’s make a lot of their money. But, if a whale were breaking the law, they would prosecute them. From the info presented, this guy broke no laws, just like card counters break no laws. But, they are persona non grata, whale or $5 bettor.

  12. @Bruce “It used to be If you counted cards when playing blackjack you would be banned from playing blackjack at certain casinos for playing at the best of your ability. What a bunch of crybabies.”

    I never understood why casinos consider counting cards cheating. As long as the player isn’t using a partner or outside aid of any kind, it’s not cheating by any other standard.

  13. Nick “Casinos don’t cheat.” I’m so relieved to know that. I hear they don’t break fingers or kill people anymore either.

  14. hoosker, Maybe an old casino or two in downtown Vegas might still be old school, but casino’s are now very corporate. Steve Wynn changed the paradigm from Teamster Union Pension Funds/Chicago,KC Cosa Nostra and Sidney Korshak to Wall St.

  15. Nick, so you are saying that if you don’t actually manipulate the game, but rather just take the information freely given by the casino to you, and use it better than the average player, that would not be considered cheating, albeit they can kick you out at will for any reason.

  16. Gary, Make so mistake, they can and do kick people out, for any reason. If I were this kid, I would play the race card. That would make it much more interesting. They can kick you out simply because you win too much and get away w/ it. But, throw in equal rights and that changes the equation. And Gary I know your reaction to their ability to throw people out is, “That’s unfair.” You are correct.

  17. Nick,
    “…There is no way a flaw like this is an advantage to the casino. ”
    It is conceivable a casino might allow such a flaw or possible flaw to exist or appear to exist in order to allow them to claim a right to get their money back if they loose big.

  18. “Edge sorting? Sounds to me like the guy grabbed a natural opportunity that was GIVEN to him by the house. I say stop whining about it and learn from the mistake.”

    From the facts alleged in the complaint it appears he grabbed a “natural opportunity that was GIVEN” only insofar as he duped Borgota (through a detailed set of instructions that Borgota agreed to) to set up the edge sort for him. Kind of like the victim of anyfinancial fraud “gives” the opportunity to the scam artist.

    I wouldn’t pay him either. That would be stupid twice.

  19. Nick, about 20 years ago I was in Vegas on company business. There was a news story on about the trial for 2 guys who had kidnapped a casinos owners daughter. I thought “WOW! The mob does not run this place any more!” I am still trying to imagine what the trial would have been like under Bugsy!

  20. I’m trying for the 5th time! The casino in question[maybe the name is triggering the spam filter] is struggling desperately, as are all casinos in AC. A whale blackjack player negotiated a great set of rules for himself and played 2 hands @ 100k each. He took this same casino for 15 million!

  21. That’s it! The B@$gata name was obviously the problem. I guess we’re on our own regarding spam retrieval. Comment Darwinism I reckon

  22. “Notably, he is being sued as well by the Malaysia-based Genting Group, which alleges that Ivey and an accomplice cheated them out of almost $12 million in baccarat”

    Time to “fact-check” Jonathan. Ivey is SUING Genting.

    Cheers — Eliot (you link to my blog)

  23. Damn, Eliot! You are the expert on this. I have heard all US casino’s are becoming more vulnerable because of over saturation of gambling and Macau. As you know, Asians LOVE to gamble and are a high % of whales. Many are going to Macau. I have bookmarked your website. I’m a gambler of 40 years. Not a whale, mostly a grinder. Give us your take on this.

  24. Nick the choir boy gambling. Say it ain’t so. It is SIN herr mongers!! I am heart broken once again. A conservative doing it with whales. A whale of a tale it is, a whale of a tale it is.

    Gonna go find a Moby …

  25. Well, Doc, I just listened to that podcast interview you gave. You explained what occurred superbly. So, no question. I will now be watching your 9 minute video on edge sorting. I consider you a great find. And, I would encourage you to comment here regularly. A person of your intellect would be a great addition. We can learn from you and you might learn a bit from folks here. Our host is a learned man. He not only teaches, he takes cases. That means a lot in my book. I’m primarily a craps player. I also play blackjack. I play nothing else.

  26. i practiced law for 35 years, almost all of which was insurance defense litigation. i saw a lot of dumb lawsuits. this is a dumb lawsuit.

    so-called “edge sorting” has been around for many decades. this is available where the markings along the long edges of cards differ slightly. the actual technique is available through a quick google search.

    mr. phil ivey is a well-known and extremely talented world-class poker player. unfortunately, like many other talented poker players, he has a “leak” – he likes to gamble away from the poker tables. i must note that most poker players agree that poker, when played correctly, is not “gambling.”

    casinos don’t make very much money from poker games. poker players do not play against the house; they play against each other. the house makes a few dollars on each hand, or charges a few dollars per player per half-hour.

    so when a well-bankrolled poker player ventures into a casino pit, away from the poker room, casino execs welcome him. in this case, the casino actually agreed to certain non-standard “conditions” demanded by mr. ivey before he would play baccarat against the house. he demanded (1) that the cards be dealt (facedown, of course) before he made any bets, and (2) that after the hand, the dealer would “rotate” some of the used cards before they were put into the “muck.” after a few passes through the entire shoe (of several decks), when the muck was re-shuffled each time by a shuffling machine, all the cards were aligned in a manner that allowed ivey to look at the proper long edge on the backs of the cards, and identify which cards were favorable and which were unfavorable. he then made bets accordingly.

    mr. ivey never touched any of the cards nor the shoe.

    disclaimer: i have known mr. ivey since the days in the mid-’90s when he was too young to play in casinos, and used the false identification of “jerome.”

  27. alan – I have heard that there is more money won or lost at private games during the poker tournaments than during the event.

  28. paul, i assume that you mean live (non-tourney) action in the poker room, rather than a private game away from the casino.
    the live action in a poker room during a tournament (which can last from a few days up to almost two months) heats up significantly. there are more and more tables of higher and higher stakes. in fact, many poker pros don’t play any tourneys at all, but follow the tournament trail around the country for just that reason.

  29. alan, I’m a PI who worked for attorneys like yourself. Stick around on other topics. There is the insurance scam attorney post today that might interest you.

  30. I heard Doyle Brunson (sp?) talking about playing poker outside the tournament and it sounded like private games, but I would not know for sure. They were also betting on golf, etc. at high stakes.
    Personally, I liked Phil Ivey when he first started playing on tv, but later he seemed to get a different vibe about him. Although in this case I think the casino’s case is against the card manufacturer, but at the same time, since it seems to be a common occurrence, they should have caught it.

  31. paul, i am sure that doyle brunson (the “godfather” of modern-day poker) was referring to the side action i described. most players, especially the fish, prefer to play in the relative safety of a casino cardroom rather than in an unknown, unregulated and unsupervised private game.
    i repeat that, before mr. ivey sat down to play baccarat against the house, he had already reached an agreement with the casino about his non-standard conditions. i am quite certain that while he was playing for big bets, there were two or three pit bosses and shift managers present to watch the game.
    this is a dumb lawsuit.

    nick, i regularly read mr. turley’s blog about once a week. i have made only one earlier contribution, about the irreverent al charlatan and the tawana brawley fraud.

  32. No such thing as a professional gambler. Professional “gamblers” don’t gamble. They only make sure bets that they know will have them win a little more than 50%. A 1% or less winning margin is all a casino needs to make huge bucks. Win $10,000,000 and lose $9,000,000 a day and the casino is ahead by $1,000,000. This might be composed of hundreds of individual small percentage wins.

  33. the next episode of “60 minutes sports” on showtime will include an interview with phil ivey, in which he discusses the issue of edge sorting. here’s a preview:

    i note that, despite the first line of this article, neither mr. turley nor anyone else has still not yet provided the slightest evidence nor even any hint of any “scandal.”

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