(CN) - Two professional gamblers who won more than $9.6 million must face a New Jersey casino's claims that they used an "edge sorting scam" to distinguish good cards, a federal judge ruled.
According to a complaint the casino filed in April 2014, Phillip Ivey, a gambler who claims to be the "greatest professional poker player of all time," first contacted the Borgata Hotel Casino & Spa in Atlantic City, N.J. in the spring of 2012.
Borgata says it granted Ivey's requests to play high-stakes Baccarat with Ms. Cheng Yin Sun at his side in a private area or "pit," with a Mandarin-speaking dealer, an 8-deck shoe of purple Gemaco Borgata playing cards, and an automatic card shuffling device.
In return, Ivey agreed to wire Borgata a $1 million "front money" deposit, and that the maximum bet would be $50,000 per hand, the casino claims.
Ivey then allegedly won over $2.4 million within 16 hours of play with a $25,000 average bet, and the next month, he won about $1.6 million within 56 hours with a $36,000 average bet.
When Ivey returned to Borgata in July 2012, he raised his front money and maximum bet, and won nearly $4.8 million within 17 hours, with an $89,000 average bet, the casino says.
Ivey later won about $825,000 within 18 hours with a $93,800 average bet in October 2012, after being up almost $3.5 million, the complaint states.
Borgata claims it soon learned through a media report that Crockfords, a London casino, was withholding £7.3 million Ivey won playing Punto Banco, a game very similar to Baccarat.
The New Jersey casino says it then found out that Ivey had made the same setup requests to Crockfords as he did to Borgata, and that he and Sun committed an "edge sorting scam."
The scam entails "turning" strategically important cards to distinguish them, relying on a manufacturing defect that causes the two long edges of the card backs to look different.
Sun would allegedly tell the dealer a card was "good" or "bad" in Mandarin, so he would flip the card accordingly, and the card shuffler kept the cards facing the indicative directions.
This "first card knowledge" changed the overall odds of the game from a nearly 1.06 percent house advantage to an approximately 6.765 percent advantage for Ivey, the casino says.
Borgata sued Ivey, Sun, and card manufacturer, Gemaco Inc., for breach of contract, fraud, conspiracy, and RICO violations, among other related claims, in New Jersey federal court.
Ivey and Sun, in turn, moved to dismiss Borgata's claims, but U.S. District Judge Noel Hillman held the pair's luck had run out.
"Ivey and Sun argue that Borgata willingly agreed to all of their requests and provided all the implements of gambling, and that all of those requests, along with their observation of the patterns on the playing cards, were lawful," Hillman wrote. "Ivey and Sun also note that even though Borgata wishes to cast itself as a victim of deceptive intentions, the 'essential mission of Borgata's casino operation is to encourage patrons to lose money by orchestrating a plethora of deceptive practices, such as loud noises and flashing lights on slot machines, hiding the clocks, making exit signs almost impossible to find, having cocktail waitresses wear revealing clothing, and comping copious amounts of alcohol to "loosen up" their patrons.'
"There is no doubt that much of the defendants' characterization of the casino milieu is accurate, as tangential a defense as it may be," the judge continued. "And there is also the begged and largely ignored question inherent in plaintiff's allegations of why the casino - especially its own card dealer - took so long to figure out the defendants' alleged scheme. But at this stage of the proceedings Borgata has pled plausible claims sounding in fraud. The court will therefore allow the case, in addition to Borgata's claims against Gemaco, to proceed through discovery."
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