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Sunday, April 13, 2014

Phil Ivey, Card Cheat?


Phil Ivey is considered one of the best poker players in the world. He has won nine World Series Of Poker bracelets and millions of dollars in cash games. He also has a reputation as a big-time gambler, a "whale" who puts huge sums at risk at the craps tables, which has made him welcome in casinos all over the world. Now he's involved in lawsuits with two of them who accuse him of cheating -- but not at poker or craps.

The most recent suit was filed by the Borgata in Atlantic City, where Ivey won $9.6 million playing baccarat. According to the Associated Press:
The lawsuit alleges Ivey and an associate exploited a defect in cards made by a Kansas City manufacturer that enabled them to sort and arrange good cards in baccarat. The technique gave him an unfair advantage on four occasions between April and October 2012, the casino asserted in its lawsuit. The casino claims the technique, called edge sorting, violates New Jersey casino gambling regulations.

The lawsuit claims the cards, manufactured by Gemaco Inc., were defective in that the pattern on the back of them was not uniform. The cards have rows of small white circles designed to look like the tops of cut diamonds, but the Borgata claims some of them were only a half diamond or a quarter of one.

The lawsuit claims that Ivey and his companion instructed a dealer to flip cards in particular ways, depending on whether it was a desirable card in baccarat. The numbers 6, 7, 8 and 9 are considered good cards. Bad cards would be flipped in different directions, so that after several hands of cards, the good ones were arranged in a certain manner — with the irregular side of the card facing in a specific direction — that Ivey could spot when they came out of the dealer chute.

The lawsuit claims Ivey wanted the cards shuffled by an automatic shuffling machine, which would not alter the way each card was aligned.
The other suit was filed by Ivey against Crockford's a London casino that wouldn't pay him the $12 million he won playing punto banco because he was using "edge-sorting" to know which cards were coming out of the shoe next. According to the Daily Mail:
It was well known in the industry around this time, according to Mr Ivey’s claim, that players might be able to use imperfectly cut cards to their advantage. Because of this, the claim adds, the casino should have thoroughly checked them before use.

On his visit to Crockfords, Mr Ivey was accompanied by a Chinese associate known as Kelly, who was adept at "identifying the design flaws." Mr Ivey’s claim says: "During the second session on August 20 [Mr Ivey] made various requests for decks of cards to be changed at the end of hands with which [Crockfords] chose to comply. This continued until Kelly identified a deck or decks of cards where the pattern on the reverse side of the cards was asymmetrical (in that one “long’’ side was different from the opposite side)."

Outlining how the pair managed to "edge sort" the deck, the claim says: "Kelly would ask the dealer to reveal each card in turn by lifting the edge furthest from the dealer so that Kelly could identify whether the card was a seven, eight, or nine – the key cards in punto banco. The first time that Kelly identified a key card, she told the dealer that it was a "good" card which she wanted the dealer to rotate in the opposite direction to all the other cards and the dealer complied with the request.

"In this way, the long edges of the key card became distinguishable from those of the other cards." Over the course of time, "the cards in the deck were increasingly orientated so that “good” and “bad” cards faced in the opposite direction." This meant that Mr Ivey was later able to recognise the key cards and bet accordingly.
The Borgata lawsuit isn't the first time Gemaco's been involved in controversy. The Golden Nugget, another Atlantic City casino, claims the card company screwed up and caused it to lose $1.5 million to players.

Here's a video with a good explanation of how to edge-sort. How is it possible that a large casino doesn't know about edge-sorting and doesn't set up procedures to prevent players from using it? Here's another story with more details on what went down at the table.

Then there are the moral questions: Is it cheating if the casino uses defective equipment and a player is savvy enough to spot it and exploit it? What about if the casino wants a player to stay at the table as long as possible, and thus allows a player to arrange the cards in a way that's beneficial to him? Did the Borgata know about the Crockford's lawsuit? If so, why did they let Ivey play at their tables, and to dictate the position of the cards? 

The best answer I've seen to those questions is a post from someone with the username "1938ford" on the Two Plus Two poker forum thread on this topic:
Okay, I'll take a stab at explaining. First, the cards were not "marked" in any way that made them distinguishable from one another during normal play and use. Only when Ivey and his cohort had them "placed in a condition" other than the normal random position they should be in could the differences in the cards be discerned. In order to keep the cards in this position Ivey insisted on using an automatic shuffler, because hand shuffling the cards usually involves a "scramble" and or turns of the deck during the shuffle, which would put the cards back into random order, which is the entire purpose for shuffling the cards. Also, Ivey insisted on a very specific deck of cards, make and color, because he he knew the differences in the cards could be exploited by his scheme. Ivey insisted the same 8 decks of cards be used over and over and not be replaced during his session.

Ivey asked for all of these things explaining that they were merely "superstitions". However, Ivey and his partner knew that was a lie, which makes it a fraudulent representation. They knew this "scheme" would "tend to alter the normal random selection of characteristics or the normal chance of the game which could determine or alter the result of the game."

In furtherance of this scheme Ivey bet the minimum during the "staging process" of his scheme, which was rotating all of the cards into a position where he could exploit the "un-random" position of the cards, whereupon he proceeded to bet the maximum on every hand thereafter. He did this because he was able to determine the relative value of the first card off the deck for each hand. This knowledge, obtained only by his lies to the casino about his "superstitions", his knowledge of a "defect" in a certain brand and color of playing cards and the use of an automatic shuffler shifted the odds of the game into his favor, which is illegal under the controlling law.

I continue to struggle with the rational that this conduct is "okay". Would it be okay if it was the casino exploited some inside knowledge, of any kind, they might have in order to manipulate any game to change the games normal odds to odds that made them even bigger favorites?
There are undoubtedly poker players who have lost to Ivey -- either in tournaments or high-stakes cash games -- who, upon hearing these stories, will convince themselves that he must have cheated them by seeing something in the patterns of the cards during hands they played. That seems unlikely, because of the way cards are mucked at the end of a hand, the top card is always "burned" before the next card in a round is dealt, and the way players often cover them with their hands during play.

Final note: if you click the link for the AP story, you'll see a ridiculous photo accompanying it, showing a player holding four aces in his hand. I don't know what card game that is, but it's certainly not baccarat or punto banco, the games the story is about!