Poker pro Phil Ivey and his friend is ordered to give back about $10.1 million that they won from the Borgata casino in Atlantic City while they were playing cards and using a technique called "edge sorting" to improve their chances of winning.
The damages include $9.6 million which they won doing edge sorting while playing baccarat on their four visits, plus an extra $504,000 that Ivey had won at craps with the use of his winnings from the baccarat games.
In October, US District Judge Noel Hillman had ruled that while Ivey and his friend Cheng Yin Sun did not commit fraud, they still breached their contract with the casino and thus were liable for damages.
The judge said that the breach was that they failed to follow the state's Casino Controls Act, which disallows marking cards. Even if they did not physically mark the cards, they were keen to notice any flaws or inconsistencies seen on the backs of the cards so that they can distinguish which ones (high or low-value cards) were coming up next.
Judge Hillman wrote in his decision on October, "Knowing the value of the card beforehand ... dramatically increased the odds their resulting bets would beat the house. And beat the house they did."
Ivey countersued the Borgata, demanding that he be compensated for damages and the suit against him be tossed out. He argued that it was the casino's fault for not noticing the inconsistencies on the back design of the cards. Being able to notice these inconsistencies and betting accordingly is not cheating or illegal, he said.
According to court documents, the set-up at the ‘sometimes days-long' Baccarat games at the casino, Ivey let Sun sit with him at the table. He requested that a Mandarin Chinese-speaking dealer tend to them, only one deck of purple Gemaco Borgata playing cards should be used for all their games, and it should only be shuffled by an automated shuffling device.
The design on the back of the cards weren't perfectly symmetrical, and this allowed Sun to discern the flaws on them - one edge had more of a geometrical pattern than the other.
If the card is of a high value, Sun would ask the dealer to rotate it so that the flaw would easily be identified when the card came back around.
Judge Hillman wrote, "Baccarat is a casino game well known for unique and superstitious rituals. Thus, Sun telling the dealer to turn a card in a certain way did not raise any red flags for Borgata."
The automated shuffling device will not disrupt the orientation of the card, so as the games went on for hours, the odds of winning for Ivey became bigger and as a result he was keen to place consistently high bets.
As stated in the court documents, within 16 hours Ivey won $2.4 million on his first visit at the casino in April 2012, with a max bet of $50,000. He then increased his max bet as he came back for more baccarat sessions in May, July and October. His best day was in July, where he bet about $89,000 a hand and won $4.8 million in 16 hours.
Upon learning that a casino in London was withholding Ivey's winnings from high-stakes Punto Banco games, the Borgata sued the poker player. Judge Hillman wrote, "The game is ‘essentially the same as Baccarat'and Ivey had made the same requests he made to the Borgata about the cards and Sun's presence."
Right after the judge's ruling, the Borgata casino submitted a request to use a formula for calculating damages that could be used as compensation, which amounted as high as $15.5 million ($5.4 million on top of the $10.1 million). This was based on a theory of what the casino might have won if the odds had not been heavily adjusted in the player's favor. The judge also rejected the request by Borgata that Ivey pay back $249,199 in comps - listed only as "goods and services" - that the casino gave him while he played there.
The judge ordered instead that the payment of $10.1 million that Ivey won in playing baccarat (and craps) be given back to the casino.
Ivey's attorney Ed Jacobs said that the judge found that his client "committed absolutely no fraud and followed every single rule of the game of Baccarat. Nonetheless, the judge disapproved of his gambling technique. This was simply a skilled patron of the casino combining his intellect, his visual acuity and his skills to beat the casino at his own game. He did absolutely nothing wrong, he never touched the cards. He was simply able to out-think and out-strategize the casino."
Jacobs said they are appealing, "This case is not over. That's round one, we will be back."