If Raffi Melkonian, a lawyer in the Houston-based law firm Wright, Close & Barger LLP, poker Hall of Famer Phil Ivey has a 50% to 60% chance of winning a $10.1 million court case on appeal. Melkonian was speaking about the legal battle between Atlantic City’s Borgata and Phil Ivey, who in 2012 won $9.6 million from the casino using edge-sorting techniques to gain an advantage at a high stakes baccarat table.
The respected attorney told US Bets/NJOG it is in essence a “coin toss” whether Phil Ivey wins an appellate decision against Borgata. Melkonian said, “I would give this better-than-average chances of getting reversed. I think he has a pretty good shot at winning.”
Given the huge sum of money at stake, if one were calculating pot odds, the person would mount an aggressive legal challenge to the $10.1 million decision that Borgata won in a New Jersey federal court. Since then, Borgata — owned by MGM Resorts International — has taken an aggressive approach to being paid by the poker professional.
Instead of waiting for Phil Ivey’s appeal to play out, Borgata asked a federal judge for permission to go after Ivey’s assets in Nevada, where most of his money appears to be banked. Raffi Melkonian says it will take 8 to 12 months before the Third Circuit Court of Appeal in Philadelphia to reach an appellate decision, which means Borgata would need to wait somewhere between November 2019 and March 2020 under normal circumstances.
Noel Hillman Rules for Borgata
The Houston lawyer cited the original October 2016 decision by U.S. District Court Judge Noel Hillman, who determined that Phil Ivey and Cheung Yin “Kelly” Sun did not commit fraud during the two high-stakes baccarat sessions they played at the Borgata in May and August 2012.
Instead, Judge Hillman said, under terms of the New Jersey’s Casino Control Act, Ivey and Cheung breached a contract with Borgata by cheating at the game of baccarat. Under the Casino Control Act, gaining an advantage over the casino through edge-sorting is considered cheating.
What Is Edge-Sorting in Baccarat?
Edge-sorting is a practice used in rare cases in baccarat, in which a player with a keen eye can spot minor flaws in the ways cards are printed. In the case of Ivey and Cheung, they knew that Kansas City-based playing card deck manufacturer Gemaco had a misprint on purple decks of their cards.
The back of the mid-range number value cards of the purple Gemaco deck were slightly off-center, so a person could know within a range of 4 numbers what the next card would be drawn if that flaw appeared in the shoe. Furthermore, a player skilled at edge-sorting could arrange the deck to give a player a mathematical advantage over the casino.
Special Rules for High Rollers
Of course, most baccarat players are not allowed to arrange cards, but high rollers can request special privileges from casinos like Borgata. When Phil Ivey and his playing partner visited Borgata in May 2012, they told the casino manager they wanted to play baccarat at $50,000 a hand.
Because casinos typically have a 1.06% on a banker bet in baccarat, Borgata is happy to accommodate most any high roller’s wishes when it can win $50,000 a hand. Phil Ivey wanted a dealer who spoke Mandarin Chinese, a purple set of Gemaco cards, and the right for Kelly Sun to be able to tell the dealer how to sort the cards. Borgata agreed, leading to a session in which Phil Ivey won over $3 million at baccarat.
Crockfords and Borgata Lawsuits
Several months later, Borgata convinced Phil Ivey to return for a second session, this time at $100,000 a hand. Ivey called for the same rules and got them. Playing baccarat at twice the cost per hand, Phil Ivey won twice as much money — over $6 million.
It might have ended there, but in 2013, Phil Ivey sued Crockfords Casino in London (owned by Genting) when the casino’s management refused to pay out roughly £8.6 million he had won at their baccarat table. Crockfords staff determined that Phil Ivey was edge sorting, so they refused to pay his winnings on the suggestion he had cheated.
Ultimately, the Crockfords case went to the UK’s High Court, where Phil Ivey lost on appeal. The lawsuit tipped off Borgata to what had happened in the 2012 sessions, so Borgata sued Phil Ivey to retrieve its $9.6 million in lost cash. Borgata asked for $15 million on the specious claim that would have been how much Borgata would have won in a normal session baccarat, but the judge rejected that logic.
Borgata Won $10.1 Million Award
Instead, Judge Hillman awarded Borgata the $9.6 million it had actually lost in the gaming sessions, along with another $500,000 to compensate for the comps given to Phil Ivey during those two sessions. Thus, Phil Ivey owes $10.1 million — unless he win in appellate court.
Another year will play out before the poker community learns whether Phil Ivey wins the appeal, but those following the case should know that Raffi Melkonian thinks it is a coin toss — maybe a little better than a coin toss — whether Phil Ivey wins or not. In an all-in showdown with a 50-50 or better chance at $10.1 million (and only legal fees on the line), Phil Ivey would push everything to the center of the table.