Phil Ivey is known as one of the best all-around professional card players in the world, in part because he notices things that other players, even great ones, may not. While playing baccarat at the Borgata Casino in Atlantic City in 2012, Ivey and a friend noticed inconsistencies on the back of the cards that allowed him to read some of them as if they were marked. He even asked the dealer to position the cards so he could see them better, as in “see what nobody else noticed, giving him an unfair advantage.” Some advantage: he and his associate, Cheng Yin Sun, won $9.6 million at baccarat over four visits to the casino, then won an additional $504,000 betting their winning at the craps table.
A federal judge has now ruled that the two must repay the $10 million. What they did is called “edge-sorting,”
In baccarat, players bet on the relative value of two hands of two cards each before the hands are dealt or the cards are revealed. The game is played with six or eight decks of cards placed into a dealing “shoe,” and the object is to bet on the hand that will have a total value closest to nine. If a player knows the value of the first card in the shoe before it’s dealt, the player has a significant advantage over the house. Borgata accused Ivey and Sun of exploiting defects in playing cards manufactured by Gemaco Inc. that were not cut symmetrically during the manufacturing process, so Ivey and Sun were able to spot the manufacturing defects and read the “marked” cards without actually touching or defacing them themselves. The New Jersey Casino Controls Act requires that all casino games offer “fair odds to both sides.” Without intending to or knowing, the casino was creating unfair odds against itself, and these two players made out like bandits as a result.
Ivey’s lawyer argued in a court filing that since his client never touched the cards, his advantage was like the casino trying to distract players with “free alcohol served by only the most curvaceous and voluptuous females in the industry.”
That, perhaps, was not the strongest argument he could make. In fact it’s ridiculous. I made a better one in a 2012 ethics quiz about a casino that got fleeced by baccarat players after the company that was contractually obligated to supply the casino with decks of pre-shuffled cards inexplicably did not. Once the alert gamblers noticed that they were being dealt the same sequence of cards repeatedly from unshuffled decks, they started raising their bets. After forty-one consecutive winning hands, fourteen players had won more than $1.5 million. I wrote…
If the casino, which is responsible for the cards, deals from an unshuffled deck intentionally or not, tipping the odds to the gamblers, isn’t it the casino that is violating the “fair odds” regulations? How can the gamblers be held responsible for what they had no control over, and why should the law allow the casino to benefit from violating the law?
Surely the gamblers should be able to keep their money. They didn’t cheat; they were just paying attention. Their tactic wasn’t without risk, either: at any time, a shuffled deck could have turned up (for all they knew) costing them a bundle. Essentially the casino is arguing that if it plays games uncharacteristically ineptly, players are unethical if they take advantage of it, but if gamblers play badly, the house can take them for all they are worth. Why didn’t the casino’s employees figure out that the cards weren’t shuffled? That’s their responsibility, not the players’.
Were the winning gamblers dishonest? No. Irresponsible? No. Unfair? Are you kidding? Unfair to take full advantage of the cards being dealt to them? The gamblers had no obligation to mitigate the damage to the casino from the failure of the casino’s own contractors, when the gamblers were engaged in a competitive enterprise against the casino.
Unfortunately, I don’t believe that argument works in the Ivey case. (Those 2012 players were also ordered to return their winnings.) It’s a thin distinction, but a material one: it is not the gamblers’ duty to assist the casino’s when it is playing its own games badly, but a card game played with a marked deck is unarguably invalid and unfair. Ivey’s case reminded me of a 1966 movie called “Kaleidoscope,” in which a gambler (Warren Beatty) tampers with a playing card company’s card design plates so that he can read the backs of every card dealt in every casino all over the world. We can all agree that this is cheating, I presume. OK—what if Beatty tells another gambler about the markings? It would also be cheating for that second hand beneficiary of the information to use it to win money, agreed?
Now imagine that a third gambler just notices the markings on his own. I believe he or she would have an ethical obligation to alert the casino, and not exploit the fact that the backs of the cards could be read. The 2012 episode where the gambler noticed a flaw, not in the decks themselves, but in how the cards were being dealt is close, but short of cheating. Marked cards do not allow a fair game, so Ivey cheated. Noticing that cards are being dealt in the same order is taking advantage of bad playing, and any gambler is entitled to do that.
The courts, however, didn’t see that distinction. In their estimation, both are cheating.