Winning at the Casino and Losing in Court

In my last 3 posts I have been discussing The Baccarat Case edited by W. Teignmouth Shore in which Sir William Gordon-Cuming lost his reputation when he was accused of cheating at baccarat in 1891. His attempt to restore his honour by a defamation action against his accusers proved disastrous when the jury took a mere 13 minutes to dismiss his claim of slander.

I thought there would be no further major cases involving cheating at baccarat for the game is among the simplest of card games but I was wrong.

In 2016 professional American gambler, Phil Ivey, went to trial against Genting Casinos in England. He was seeking to collect 7.7 million he had won in two sessions of gambling at Punto Banco, a variation of baccarat. (Ivey is also known as one of the best poker players in the world.)

Unlike the casual game of baccarat played in the English countryside in 1891 by Sir William, the trial judge in the Ivey case, Mr. Justice Mitting, explained the casino game of today had been statistically studied to establish the house had an advantage of "1.24% if player wins and 1.06% if banker wins".

Mr. Ivey undertook to shift the odds. Justice Mitting described Ivey's approach to gambling:

The claimant's principle is, by a variety of techniques, to

reverse the house edge and play at odds which favour him. He

does so by means that, in his opinion, lawful. He is what is

known, in particular on the other side of the Atlantic, as an

"advantage player". He is jealous of his reputation and is

adamant that he does not cheat. His principle is to find and

apply accurately "a legal way to beat the house".

His method at Genting was “edge sorting”, a card playing strategy I had not heard of before this case:

"Edge-sorting" is possible when the manufacturing process causes tiny differences to appear on the edges of the cards so that for example, the edge of one long side is marginally different from the edge of the other. Some cards printed by Angel Co. Limited for the Genting Group (which owns Crockfords) have this characteristic. The machine which cuts the card leaves very slightly more of a pattern, a white circle broken by two curved lines, visible on one long edge than on the other. The manufacturers assert that this is not a defect but is within a contractually specified tolerance of up to 0.3 millimetres. Before a card is dealt from a shoe, it sits face down at the bottom of the shoe, displaying one of its two long edges. It is possible for a sharp-eyed person sitting close to the shoe to see which long edge it is. The information thus gained is only useful to the punter if he knows or has a good idea of what the card is.

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Three conditions must occur before the punter can gain that knowledge: (1) the same shoe of cards must be used more than once; (2) cards with a face value of 7, 8 or 9 must be turned through 180 degrees by comparison with all other cards; (3) when reshuffled no part of the shoe must be rotated. Step (2) is the process known as edge-sorting.

Mr. Ivey and a Chinese gambling associate persuaded the croupier, with the approval of her supervisor, to turn the 7, 8 and 9 cards the required 180 degrees because they were superstitious and the new aligment would be lucky for them. Accustomed to gamblers with “lucky” systems which inevitably are losing systems the casino humoured the high rollers.

It was only when the casino reviewed hours of tapes that it determined Mr. Ivey had used “edge sorting” to gain the advantage he needed to win millions of dollars. They refused to pay saying he had cheated.

Mr. Ivey sued the casino. He forthrightly acknowledged what he had done and said it was not cheating. He had never touched the cards and casino supervisors had allowed the cards to be handled by the croupier as he requested.

Justice Mitting disagreed. He stated:

The fact that the claimant is genuinely convinced that he is not a cheat and even that that opinion commands considerable support from others, - see for example, Dr. Jacobson, - is not determinative of the question. It is necessary to analyse what the consequences are of what he did in relation to the game that he was playing. They were threefold.

(1) He gave himself an advantage, throughout the play of the sixth and subsequent shoes, which the game precludes – knowing, or having a good idea, whether the first card was or was not a 7, 8 or 9. That is quite different from the advantage which may accrue to a punter as a result of counting the cards, so that very near to the end of the shoe he may obtain a legitimate advantage by doing so.
(2) He did so by using the croupier as his innocent agent or tool by turning the 7s, 8s and 9s differentially. He was not simply taking advantage of an error on the part of the croupier or an anomaly produced by a practice of the casino for which he was not responsible.
(3) He was doing so in circumstances in which he knew that she and her superiors did not realise the consequence of what she had done at his instigation. Accordingly, he converted a game in which the knowledge of both sides as to the likelihood that player or banker will win - in principle nil, - was equal into a game in which his knowledge is greater than that of the croupier and greater than that which she would reasonably have expected it to be.

This in my view is cheating for the purposes of civil law. It is immaterial that the casino could have protected itself against it by simple measures. The casino can protect itself by simple measures against cheating or legitimate advantage play. The fact that it can do so does not determine which it is.

The case made its way to the English Supreme Court. Probably only a lawyer such as myself would  find it interesting to watch the oral argument which is easily available online.

While Mr. Ivey’s counsel pointed out all actions with regard to the cards were consented to by Genting staff, the Justices were troubled by the manipulation of the cards. They considered the subterfuge of “lucky” turning the cards to be more akin to physically marking or deforming a card than card counting.

Lord Hughes on behalf of the panel of judges dismissed the appeal. He said:

The (trial) judge’s conclusion, that Mr Ivey’s actions amounted to cheating, is unassailable. It is an essential element of Punto Banco that the game is one of pure chance, with cards delivered entirely at random and unknowable by the punters or the house. What Mr Ivey did was to stage a carefully planned and executed sting. The key factor was the arranging of the several packs of cards in the shoe, differentially sorted so that this particular punter did know whether the next card was a high value or low value one. If he had surreptitiously gained access to the shoe and re-arranged the cards physically himself, no one would begin to doubt that he was cheating. He accomplished exactly the same result through the unwitting but directed actions of the croupier, tricking her into thinking that what she did was irrelevant. As soon as the decision to change the cards was announced, thus restoring the game to the matter of chance which it is supposed to be, he first covered his tracks by asking for cards to be rotated at random, and then abandoned play. It may be that it would not be cheating if a player spotted that some cards had a detectably different back from others, and took advantage of that observation, but Mr Ivey did much more than observe; he took positive steps to fix the deck. That, in a game which depends on random delivery of unknown cards, is inevitably cheating. That it was clever and skilful, and must have involved remarkably sharp eyes, cannot alter that truth.

Where the baccarat case of 1891 involved the Prince of Wales and prominent members of “society” the 21st Century case featured as witnesses a professional poker player and Dr. Jacobsen, a former professor of mathematics, and David Mills, “a levelheaded and experienced English expert in casino gambling”. It is little surprise the modern case gained modest attention even though millions of pounds were at stake. It is hard to have a scandal gaining public noteriety when much of the focus is on mathematical calculation rather than a baronet surreptiously moving counters to deceive a Prince.

And Ivey lost another case in New Jersey over “edge sorting”. After winning its court case against him the Borgata casino has been pursuing Ivey for several years for the $10.1 million it paid out to him.

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Shore, W. Teignmouth (editor) - (2020) - The Baccarat Case and Cross-Examination and Argument in the Baccarat Case and The Judge and the Decision and Reflections on the Baccarat Case