Mixed Bag for Phil Ivey on Baccarat Bounty

CAMDEN, N.J. (CN) — There was no fraud, a federal judge found, but poker pro Phil Ivey did breach his contract with an Atlantic City casino when he manipulated the cards to win $9.6 million in baccarat.

The Oct. 21 ruling by U.S. District Judge Noel Hillman says employing "cunning and skill" did not violate the rules of baccarat, but use of an edge-sorting scheme did violate Ivey's agreement to play in compliance with the New Jersey Casino Control Act, which prohibits players from unilaterally increasing odds in their favor.

Borgata Hotel Casino & Spa brought Ivey and his partner, Cheng Yin Sun, to court in New Jersey two years ago after the high-stakes gamblers exploited defects on the backs of cards to adjust Ivey's bets and unfairly give him an advantage over the house during four visits in 2012. The suit also names the manufacturer of the cards, Gemaco Inc.

Rather than touching the cards or marking them in the traditional sense, Ivey and Sun distinguished strategically important cards by having them turned in the deck.

If "cards are not cut symmetrically during the manufacturing process," the ruling says, then "one edge will have more of a geometrical pattern than the other."

Because baccarat is known for superstitious rituals like asking dealers to let players "peek" at cards, Borgata's dealer did not initially realize that Sun having him flip certain cards differently so that the edges of the cards would be turned differently.

Because Sun had the dealer "turn" cards with the value of 6, 7, 8 and 9, Ivey was able to identify them later and adjust his bet accordingly.

The Borgata caught on to the edge-sorting scam only after reading a news article that said a London casino was withholding Ivey's $12.4 million winnings based on similar manipulation of the cards.

Just as he had at the Borgata, Ivey had asked the London casino to use a specific number of decks of cards manufactured by Gemaco.

Judge Hillman granted the Borgata only partial summary judgment in the ruling.

Clearing the players of fraud, the court says Ivey and Sun's "instruction to the dealer to turn the cards a certain way, did not violate any rules or regulations" of Baccarat, and they were under no obligation to reveal their true motivation to the casino.

"Borgata and Ivey had the same goal when they entered into their arrangement - to profit at the other's expense," the 30-page opinion continues. "Trust is a misplaced sentiment in this context."

Having some with the case, Hillman opened the opinion with a lyric from "Every Breaking Wave," a 2015 song by the band U2 whose guitarist is named The Edge.

The Borgata, represented by Jeremy Klausner, has 20 days to file a brief outlining damages. Klausner is an attorney with the Hackensack firm Agostino & Associates.

The partial victory was a welcome one for the casino.

"We appreciate the court's thoughtful decision validating our claims that we were harmed by defendants' actions," Joseph Corbo, general counsel for the Borgata, said in an email.

Ivey and Sun are represented by Atlantic City firm Jacobs & Barbone. They will have 20 days to file a response.

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