Phil Ivey Owes $10.1M To Atlantic City Casino, While Card Maker Could Only Owe $27

The manufacturer of the defective cards that Phil Ivey played with during controversial baccarat sessions at an Atlantic City casino scored a major victory in court this week.

According to court documents obtained by Card Player, a federal judge ruled that Missouri-based card maker Gemaco could only owe the Borgata casino-hotel a measly $27 from the fiasco. In 2012, Ivey and a playing partner were able to spot manufacturing defects on the back of the cards in order to win $9.6 million. Borgata paid Ivey his winnings but later discovered Ivey had found an edge against it. The court controversially ruled in late 2016 that Ivey owes the casino $10.1 million, which includes money he won at craps using the money won at baccarat.

The technique the 10-time WSOP bracelet winner used is called “edge-sorting.” It gave him a small but statistically significant edge over the house. The gambling sessions involved a single eight-deck shoe and the dealer obeying instructions to tilt the cards a specific way to make the asymmetries more distinguishable. The casino allowed the requests because Ivey is a high roller.

Ivey maintained that he did not cheat but rather used skill to outsmart the casino.

Ivey’s legal team moved to appeal the $10.1 million decision, but because Borgata’s case against Gemaco wasn’t resolved yet, Ivey’s appeal process was delayed, court documents said.

The Borgata was seeking $9.6 million from Gemaco for its role in the scandal. The card maker argued that the casino can’t receive “duplicate recovery,” court documents said.

“Gemaco further points out that the contract [between it and Borgata] provides that its liability is limited to the replacement of the defective cards, or the refund of the purchase price for the cards, and only if Borgata notified Gemaco in writing within 90 days of its receipt of the cards,” U.S. District Court Judge Noel Hillman wrote in the 27-page opinion.

Hillman said that Borgata has argued that any limitations on damages resulting for the baccarat sessions would be “unconscionable.” However, Hillman was unconvinced.

“There cannot be any credible dispute that the Gemaco cards used by Ivey and [Cheung Yin Sun] in 2012 had patterns on the back that were not perfectly symmetrical,” the judge wrote in the ruling. However, the judge said, “Borgata has not shown that the Gemaco cards standing alone were the precipitating cause of the scheme.”

Furthermore, the card defects were “benign” if it wasn’t for Ivey’s ability to exploit them, the judge added. An automatic shuffler was also requested for the baccarat sessions in order for the cards to remain turned in such a way to make them distinguishable.

“Out of the box, asymmetrical cards are symmetrical until strategically turned and maintained in that orientation,” Hillman said. “In that sense, it was Borgata’s acquiescence in Ivey’s accommodations that were the ‘but for’ cause of Borgata’s losses.”

Hillman called Ivey’s edge-sorting technique “creative” and “even ingenious.”

“The best remedy Borgata can obtain by proving Gemaco breached the contractual warranties is the refund of its payments for the cards in the amount of $26.88,” Hillman concluded. “The Court wonders whether, under such circumstances, the game is worth the candle.”

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