Financial terms not disclosed
Poker Hall of Famer Phil Ivey has come to a settlement with the Borgata in their long-standing legal battle. Terms have not been made public; what is known is that the July 2 filing in the U.S. Court of Appeals for the Third Circuit stated that the two parties “now reached a settlement.”
The filing also noted that after oral arguments on September 17, 2019, the case was sent to the Third Circuit’s Appellate Mediation Program.
Though Ivey and Borgata have agreed to terms, the settlement is still contingent on the District Court vacating “certain orders and decisions.” It does appear, however, that the case is finally about to come to an end,
“Edge-sorting” strategy netted Ivey millions
The case dates back to 2012, when Ivey and his playing partner, “Kelly” Cheung Yin Sun, won $9.6m playing baccarat at the Borgata. Ivey told the Atlantic City casino that he would play for high stakes – up to $100,000 a hand – and pre-wire money if the Borgata would accept several conditions for the game. Among the requests were the use of specific Gemaco cards, an automatic card shuffler, and to have a Mandarin-speaking dealer manning the game.
Borgata accepted and Ivey and Sun racked up the winnings over four sessions. They made the requests because they knew that the Gemaco cards were slightly miscut, leading to an asymmetrical pattern on the back. The miscut was very hard to see, but Sun had a sharp eye and could tell the difference in size between the design pattern on one edge compared to the pattern on the opposite edge.
This “edge sorting” technique shifted the odds dramatically in Ivey and Sun’s favor.
When a card that could benefit the player was revealed, Sun would tell the dealer (in Mandarin) to rotate it 180 degrees before putting it in the discard pile. The automatic card shuffler kept that orientation when shuffling the deck. As a result, Sun was able to tell if the top card of the deck each hand was “good” or “bad” because of the miscut pattern. This “edge sorting” technique shifted the odds dramatically in Ivey and Sun’s favor.
Six years of legal wrangling
Borgata sued Ivey and Sun in 2014, claiming that he cheated, looking to get the $9.6m back plus profit Ivey made at other table games using those winnings. In December 2016, US District Court Judge Noel L. Hillman ruled in the casino’s favor, ordering the defendants to repay $10.13m.
The casino was able to garnish his winnings at the 2019 World Series of Poker
Ivey never paid back the money and the two sides went back and forth with different filings, suits, and countersuits. Despite being in New Jersey, Borgata did get approval last year to go after Ivey’s assets in Nevada, but there wasn’t much there, as he had moved most of his money offshore. The casino was able to garnish his winnings at the 2019 World Series of Poker, though.
As to why they finally came to a settlement agreement, nobody knows for sure. Legal experts said that Ivey’s legal team presented a solid appeals case last year, countering the Borgata’s argument that Ivey “marked” the cards and therefore cheated. The best guess in the legal community is that the Borgata was afraid it would lose the appeal and that the costs were adding up for both sides, making a settlement the most prudent course of action.