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Casino Questions $10 Million Win in Baccarat

ATLANTIC CITY, N.J. (CN) - A gambler who claims to be the "greatest professional poker player of all time" exploited an imperfection in a popular brand of playing cards to bilk casinos of millions of dollars, the Borgata Hotel Casino clams in court.

Borgata Hotel Casino & Spa of Atlantic City claims it was taken for nearly $10 million by defendant Phillip Ivey Jr. before learning through media reports that he had hauled in equally large sums from a casino in London, which accused him of fraud.

Like many casinos in Atlantic City, Borgata says, it buys its playing cards from co-defendant Gemaco Inc.

In this case, the cards feature a custom-designed back consisting of a dominant background color, on top of which appear edge-to-edge rows of small white circles designed to look like the top of a round-cut diamond.

The illusion of the diamond facets is created by shading inside the circle with a lighter shade of the dominant background color. The background color fills the empty spaces between the circles. Two of the hotel's logos are the placed symmetrically on the back of each card, facing in opposite directions.

"The pattern used by Borgata on the back of the cards purchased from Gemaco is required to be perfectly symmetrical so that the back of one card is indistinguishable from the backs of all other cards, and the edges of each card are indistinguishable from one another," the complaint states.

These details are important because they are critical to understanding Ivey's alleged scam.

According to Borgata, In April 2012, Ivey contacted it to arrange a visit to play baccarat for high stakes.

Baccarat is a game of chance in which players bet on the relative value of two hands of two cards each before the hands are dealt or the card values revealed. One hand is referred to as the player's hand; the other is the banker's hand. Players may bet on either one.

The object of baccarat is to bet on the hand that will have a total value closest to nine. Tens, face cards, and any cards that total ten are counted as zero. All of the cards are counted at face value. The scores of hands range from 0 to 9. Neither hand can bust.

The game is played with six or eight decks of cards placed into a dealing shoe, and the players are required to bet before the cards are dealt.

"Because of his notoriety as a high-stakes gambler, and the amount of money he intended to gamble, Ivey was able to negotiate special arrangements to play baccarat at Borgata," the casino says in the 48-page complaint, with 10 pages of exhibits, including reproductions of the allegedly imperfect cards.

In return for agreeing to wire a $1 million deposit to Borgata, Ivey was provided with a private area in which to play, a casino dealer who spoke Mandarin Chinese, permission to have a guest sitting at his table as he played, an 8-deck shoe of playing cards to be used for the entirety of his play, and a promise the dealer would use an automatic card shuffling device after each shoe was dealt, according to the complaint.

"The pretext given for some of these requests was that Ivey was superstitious," the casino says. "Ivey's true motive, intention, and purpose in negotiating these playing arrangements was to create a situation in which he could surreptitiously manipulate what he knew to be a defect in the playing cards in order to gain an unfair advantage over Borgata."

Ivey was accompanied to his table by co-defendant Cheng Yin Sun, who spoke to the dealer in Mandarin Chinese, instructing him how to flip over and lay the cards on the table, according to the lawsuit.

On its face, Borgata concedes, this was not unusual - many baccarat players make special requests for how cards are dealt based on individual superstitions.

But it this case, the casino says, "the true purpose of Sun's request was to manipulate a defect in the playing cards to gain an unfair advantage over Borgata."

On his first visit to the casino, Ivey won more than $2 million; on subsequent visits he raised the amount of money he put on deposit, inspiring the casino to raise the maximum bet he could make on each hand.

After several winning visits - during which he won a total of $9.6 million - Ivey requested that his "front money" and winnings be wired to a bank account in Mexico, the casino says.

Before it did so, Borgata claims, it asked Ivey about a media report that the Crockfords casino in England was withholding his winnings because it believed he and Sun had run a scam involving manipulation of cards to gain "first card knowledge."

Ivey sued Crockfords to recover his winnings, and the case is pending in England, according to the complaint.

Borgata claims that Ivey used the same method in Atlantic City that he used at Crockfords in England.

The method, described as "edge sorting," exploits a manufacturing defect in which cards are not cut symmetrically during the manufacturing process.

"During play, Ivey and Sun used the accommodations they requested from Borgata to 'turn' strategically important cards so that they could be distinguished from all other cards in the deck," the complaint states.

The casino claims that Ivey and Sun, relying on a defect in the cards only they recognized, turned the cards with values of 6, 7, 8 and 9, so they could be distinguish them from all other cards in the deck, giving them an advantage in every game.

Exhibit B, attached to the complaint, shows that some diamond shapes on the back of the cards appear to be cut off slightly differently on the two long sides of a card. This apparently is the defect that Ivey is accused of exploiting.

The Borgata Casino wants its $9.6 million back, and damages for breach of contract, breach of faith, fraudulent inducement, fraud, illegality of purpose, unjust enrichment, conversion, civil conspiracy and RICO conspiracy.

It also seeks a declaration that Gemaco, the maker of the cards, is liable to indemnify it against any and all current and future losses resulting from the defect in the cards.

The Borgata is represented by Jeremy Klausner of Agostino & Associates in Hackensack.

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