Were Phil Ivey's $9.8 Million Atlantic City Casino Winnings Fair or Foul?


Phil Ivey is getting sued by Borgata, an Atlantic City casino, for winning almost $10 million on the Baccarat tables. In 2012, Ivey had several inordinately successful nights at the casino after making a special set of demands, which included a private room, a dealer that spoke Mandarin Chinese, an automatic shuffler, and the casino letting Ivey use a specific deck of Gemaco cards.

Ivey’s stipulated cards had asymmetries on their backs, and his stipulations made it so he and a partner could exploit important differences and give themselves a 6.765% advantage over the house (which is typically favored 1.06% over the player). NorthJersey.com quotes Borgata’s suit:

"The pretext given for some of these requests was that Ivey was superstitious. Ivey misrepresented his motive, intention and purpose and did not communicate the true reason for his requests to Borgata at any relevant time. 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."

For some more general background information, Grantland had a story last year detailing the specifics of this “edge-sorting” strategy that Ivey was similarly accused of using in London (for which Ivey is actually suing because his winnings went unpaid by the casino), while this 2012 AP Heat post goes over the intricacies of the math.

It is the irony of ironies that Borgata, who claims the “loosest slots in Atlantic City” but nevertheless held 8.3% of slot machine deposits in the first nine months of 2013, would cry foul over lopsided advantages.

However, whether or not it is illegal, should we consider what Ivey did to be untoward? “In my opinion, it’s unethical,” freelance journalist David Purdum, who has been covering the gaming industry for six years, tells The Big Lead. “Bringing a defective deck and using it to give you an advantage crosses the line. If Ivey spotted a defect in the cards already in play at the casino, that’s a different story.”

But the casino should have better controls in place — Ivey’s scheme was carried out on four nights throughout the year. This case would seem to be the opposite scenario of the guy who got drunk for a weekend in Vegas and then sued to recoup his losses.

“Regardless, if I’m in charge at Borgata,” Purdum continues. “I’m reviewing the competence of my staff. With all of Ivey’s special requests, how do you not suspect something’s up while it’s going on and stop the game?”