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Phil Ivey loses appeal against London casino Crockfords over £7.7m winnings 04/11/2016
Nadia Khomami
• Phil Ivey’s ‘edge-sorting’ technique to predict cards was deemed to break the gaming contract with Mayfair casino

A professional US poker player has lost his appeal against a London casino over winnings of £7.7m due to his use of “edge-sorting”, a gambling technique that involves exploiting design irregularities on the backs of cards.

Phil Ivey, 39, had challenged a 2014 high court decision to dismiss his case against Genting Casinos UK, which owns Crockfords Club in Mayfair. After successfully playing a version of baccarat known as Punto Banco at the casino two years earlier, Ivey was told his winnings would be wired to him and he left for home in Las Vegas, but it never arrived. Instead, his stake money of £1m was returned to him.

Genting, which owns more than 40 casinos in the UK, said edge-sorting, which Ivey used to gain a competitive advantage, was not a legitimate strategy and the casino had no liability to him.

The tactic allows players to predict whether a card may be high or low – and therefore beneficial to their hand – by finding tiny irregularities in the back of each card.

The manufacturing process in some decks of cards causes tiny differences on the edges of playing cards. Some cards printed for the Genting Group have this characteristic, as the machine that cuts them leaves a pattern – a white circle broken by two curved lines – that is more pronounced on some cards than others.

Genting claimed that Ivey’s exploitation of the printing differences defeated the essential premise of the game of baccarat, thereby invalidating the gaming contract at best, or cheating at worst.

The casino’s chosen manufacturer, Angel Co Ltd, says this is not a defect and is within a contractually specified tolerance of up to 0.3mm.

On Thursday in the court of appeal, Lady Justice Arden said it was common ground that there was an implied term in the contract not to cheat and the meaning of cheating for that purpose was to be determined in accordance with the Gambling Act 2005.

“In my judgment, this section provides that a party may cheat within the meaning of this section without dishonesty or intention to deceive: depending on the circumstances it may be enough that he simply interferes with the process of the game,” Arden said. “On that basis, the fact that the appellant did not regard himself as cheating is not determinative.”

There was no doubt, Arden added, that the actions of Ivey and another gambler, Cheung Yin Sun, interfered with the process by which Crockfords played the game. “It is for the court to determine whether the interference was of such a quality as to constitute cheating. In my judgment it had that quality.

“In particular the actions which Mr Ivey took or caused to be taken had a substantial effect on the odds in the game and Crockfords were not aware of this at the relevant time. In these circumstances, no lower standard applied in this case because Mr Ivey was an advantage player who was in an adversarial position with the casino.”

Ivey has maintained that he did nothing more than exploit Crockfords’ failure to protect themselves against a player of his ability. “I was upset as I had played an honest game and won fairly. My integrity is infinitely more important to me than a big win,” he said.

Arden and Lord Justice Tomlinson dismissed the appeal but the third member of the panel, Lady Justice Sharp, allowed it, saying that the trial judge, Mr Justice Mitting, was wrong to construe the issue of “cheat” in the way that he did.

Mitting had said the fact that Ivey was genuinely convinced he did not cheat and the practice commanded considerable support from others was not determinative of whether it amounted to cheating. He added that Ivey had gained himself an advantage and did so by using a croupier as his innocent agent or tool.

In the judge’s view, this was “cheating for the purpose of civil law”.

After the ruling, the Genting UK president and chief operating officer, Paul Willcock, said the company was “obviously very happy with the decision”.

But Ivey said the decision made no sense to him. “The trial judge said that I was not dishonest and the three appeal judges agreed, but somehow the decision has gone against me. Can someone tell me how you can have honest cheating?” he said.

The poker player’s lawyer, Matthew Dowd, said: “The court of appeal’s decision leaves the law totally unclear as to what constitutes cheating at gambling.

“Four judges have looked at this issue now and none of them have been able to agree on the correct interpretation of section 42 of the Gambling Act.

“It is essential that the law is clarified and, in light of today’s decision, we are seeking permission to appeal to the supreme court.”

Ivey has also been embroiled in a legal battle over edge-sorting with an Atlantic City casino. Last month, a US district judge ruled that while Ivey and Sun didn’t cheat, they were liable for breach of contract when they used the technique to win $9.6m.