(UPDATE: Read an update on the case at the bottom).
The exact figure in the London case is 7.8 million British pounds. The conversion to United States dollars fluctuates daily, but the 7.8 million pounds figures nearly always translates into a figure of over $12 million dollars.
The controversy began at a luxurious London casino called Crockfords, which describes itself as “the most exclusive casino in Mayfair.” It’s also been called the oldest private gaming club in the world.
From the outside it doesn’t resemble a casino at all, in the way all of us Americans picture one (there are no “$3.99 Steak and Egg specials” here). In fact, Crockfords looks more like a stately English townhome, or even the Prime Minister’s famous residence at 10 Downing Street. In either case, the elegant Crockfords traces its roots back to 1828 – over a 100 years before Nevada became a state.
Buying in for a million pounds, (around $1.3 million dollars), Ivey and a (by many accounts), an attractive Chinese woman named Kelly, began a roller coaster ride of wins and (some) loses, while seated in a private room at Crockfords playing punto banco during a wild two night stretch in August of 2012. Phil Ivey is just recently divorced from wife Luciaetta Ivey.
Phil Ivey and Punto banco, or Baccarat
Punto banco is a fancier way of saying “baccarat.” In Spanish, “Punto” means “Player” while “Banco” means “Bank.” In baccarat, you bet on either the player or the bank (the house) to get closest to 8 or 9. You may also bet on a “tie” but the house edge on it is huge, compared to the relatively low edge on betting on the bank or player. I think. I’ve only played it once while drunk at the Plaza in downtown Las Vegas. Our minimum bets were $5 – slightly less than Ivey’s bets that night of August 19, 2012, in which he started off betting 50,000 pounds a hand.
(More here: Is Phil Ivey broke?)
After several rounds playing 50,000 pounds a hand, Ivey and Kelly soon found themselves down 500,000 pounds. At this point, Ivey asked that the stakes be raised. The casino complied, and bets were now placed for 150,000 pounds a hand.
This is when things starting getting interesting for Ivey, and terrifying for Crockfords, as a “whale” like Ivey betting heavy while on a hot streak can act as a wrecking ball to a casino’s quarterly earnings.
Ivey and his friend soon erased the deficit, then found themselves up 2 million pounds. Unlike myself after booking a win, Ivey and his partner decided to call it a night, promising the casino to come back the following evening, so long as the same cards were to be used when they returned.
The following night, August 20, 2012, Ivey “ran good,” ending up booking what would be a 2 day total score of over $12 million.
According to the London’s Daily Mail newspaper, which claims to have seen the various back and forth court filings, Ivey and Kelly were able to recoup their losses and begin the hot streak via an ingenious technique called “edge sorting.”
Basically, edge sorting is simply taking notice of the slight variances in the edges of what are supposed to be strictly 100% uniform-looking cards, thereby being able to predict the next cards to come off the deck. To put it in simpler terms: the backside of a normal deck of cards has perfect symmetry in nearly all cases. When there is even a tiny misprint or mis-cut of the backside, “edge sorting” players can use
this information to know which cards are coming up next.
Ivey admits to “reading” the cards, but claims the edge sorting doesn’t make him a cheat but rather, and “advantage player.”
For their part, Crockfords said Ivey “operated a scam” and has thus far refused to pay the popular poker pro his money.
Crockfords has given back Ivey’s original $1.3 million dollar buy-in, transferring the funds to Ivey’s bank account, but considering he won over $12 million, what amounts to a ten-cents-on-the-dollar payout isn’t going to satisfy an experienced high stakes gambler like Ivey. In May of 2013, he and his lawyers sued the London casino in attempt to force them to pay what they consider to be Ivey’s legitimately-won earnings. In a statement, Ivey wrote:
“I was given a receipt for my winnings, but Crockfords has withheld payment. “I have no alternative but to take legal action.”
Phil Ivey Borgata Baccarat Cheating Scandal
Claiming cheating allegations very similar to the Crocfords’ claims, The Borgata Hotel and Casino in Atlantic City, New Jersey filed a lawsuit against Phil Ivey On April 9, 2014. Like the London-based lawsuit, the Atlantic City lawsuit – filed by Boyd Gaming, which owns the Borgata – alleges Ivey and a Chinese associate, Cheng Yin Sun, conspired to used flawed markings on cards to take $9.6 million from the casino in baccarat winnings in 2012. It is unknown if Cheng Yin Sun, a female, is the same associate Ivey played with in the Crockford’s case.
According to the lawsuit, Ivey and his companion’s edge-sorting enabled the duo to take $9.6 million in winnings in a period from April of 2012 to October 2012. During the four sessions in question, Ivey reportedly bet hands ranging from $25,000 to $100,000 per hand.
It’s not known if Crockfords and the Borgata shared surveillance video and information, but it seems likely, given the close timing of the two lawsuits, as well as the similarity of the allegations.
On July 2, 2014, Phil Ivey’s lawyers filed papers seeking to dismiss the Borgata’s lawsuit. In court papers, Ivey’s team claims that all of the $9.6 million won in the baccarat sessions were the result of “sheer skill.”
They also argued some technical legal aspects, such as how the Borgota failed to pursue this case within the reported six month statute of limitations, and how only the New Jersey Gaming Commission would be allowed to go after a gambler accused of cheating – rather than a casino itself.
On October 8, 2014, a judge in London, ruling on the Crockford’s case, ruled in favor of the casino, stating that Ivey’s use of Edge sorting was tantamount to cheating. As a result of the case, the casino does not have to pay out to Ivey, the $12 million plus in winnings.