Phil Ivey and Cheng Yin Sun Won $9.8 Million from Borgata at Baccarat in 2012
Borgata’s parent company, Marina District Development Company LLC, filed a countering brief in response to a recent filing by the Phil Ivey legal team. Ivey’s lawyers recently filed a motion to dismiss Borgata’s $9.8 million lawsuit against him. The motion to dismiss was filed three weeks ago, while Borgata’s filing occurred this past Monday.
Borgata’s original lawsuit was filed in April 2014, alleging unfair play by Phil Ivey and his companion. At issue was a technique called “edge sorting”, which sorts the cards in a certain way to give the player a betting advantage. To gain that advantage, the player has to know the order of the cards, which Borgata alleges Ivey knew.
How Edge Sorting Works
A particular type of card, a purple deck from Gemaco Inc. out of Kansas City, were used during the Ivey sessions. These were provided to Phil Ivey and his companion on request. Ivey was playing as a high roller for $50,000 and, in later visits to the Borgata, for $100,000 a hand.
Certain of the purple Gemaco playing cards had been mismarked at the manufacturers, so a player could know a particular range those cards fell into, if the backs of the cards remained in place. That is where the “edge sorting” is relevant: Ivey and companion are alleged to have sorted the cards so the defective side was always pointing one direction, therefore allowing the players to know at all times which cards would be arriving on the deal.
Using this method, an edge sorter would be able to bet accordingly. Over several gaming sessions (over a several month period), Ivey and companion won $9.8 million from the Borgata at baccarat. As the famous poker player continued to win, Borgata’s management continued to increase his bet limit. Because the casino expects to play at an advantage (the house edge), a casino which is losing only hopes to keep the playing betting, until the odds catch up to them.
Suing to Even the Odds
That never happened, so Borgata is trying to recoup their money, because Phil Ivey was playing at an advantage. The Borgata filed its lawsuit only after casinos in London and Singapore took actions against Ivey, claiming he did the same to them. Belatedly alerted to the ruse, the Borgata is trying to collect what it lost. Also included in the lawsuit is Gemaco Inc. and an unnamed Gemaco quality control supervisor.
Phil Ivey’s legal filing in early July claimed the Borgata’s case is baseless. New Jersey law states that a casino can sue in these cases, but never the player who won at their expense. There’s also a question on the time limit to sue, which is 6 months, according to New Jersey laws. Phil Ivey won the $9.8 million from Borgata in 2012–nearly two years ago. The Monday filing by Borgata challenges that interpretation of the law.
Phil Ivey’s motion also included citations from other legal cases involving restitution between a casino and its former patrons. The Monday filing by Borgata challenges Ivey’s contentions, saying those cases involved private citizens suing casinos and therefore were irrelevant.
Skill vs. Foreknowledge
A key theme in Phil Ivey’s motion to dismiss was the idea that Ivey and his companion won because of cleverness and skill, and not because of some cheating method. A passage from the Ivey filing stated, “There simply is no private cause of action by player or casino to revoke and require restitution of gambling winnings or losses because of some perceived ‘illegality’ which springs from nothing more than a player’s subjective intent or use of his five senses.”
This idea was attacked by the Borgata’s legal team on Monday in this passage, which was cited by 4Flush: “Although [the Defendants’] motion cleverly attempts to apply existing case law to the facts in this case, [the] Defendants’ cannot escape the fact that it is only casinos, and not casino patrons, that are regulated by New Jersey’s Casino Control Act. While certain claims by patrons against casinos may be preempted by the Casino Control Act, there is no preemption in reverse. New Jersey’s Division of Gaming Enforcement simply does not have the power to order casino patrons to take any act, including making restitution to casinos for fraud, cheating, or breach of contract. Indeed, the only way for Borgata to seek redress against Ivey and Sun [Ivey’s co-defendant, Cheng Yin Sun] is through legal action.”
In other words, Borgata could not have the enforcement wing of New Jersey’s government force Ivey and Cheng Yin Sin pay back the money, so they were forced to sue. This, of course, does not exactly address the issue Ivey’s lawyer stipulated in the filing.
Pursuing Criminal Charges in Civil Court
Another of Ivey’s assertions is the Borgata is pursuing criminal charges in civil court by trying to enforce provisions of the New Jersey Casino Control Act [CCA]. Ivey’s lawyers state such a statute does not apply to players, and it is a corruption of the CCA to allow a casino to pursue claims against a private player which amounts to legal sanction.
The filing by Borgata’s lawyer (Jeremy Klausner of New Jersey firm Agostino & Associates) made a distinction between criminal and civil actions, but left on the table the idea that Ivey and his companion might one day have civil RICO (racketeering claims) charges filed against them. It has been hinted that the Borgata might have turned over information to New Jersey’s criminal gaming enforcement division, but that agency might have refused to press charges.
