October 30, 2017

Professional gambler, Mr Ivey, sued Genting Casinos (UK) Ltd, trading as Crockfords, to recover his winnings at Punto Banco, a variant of Baccarat.  Crockfords had refused to pay out because it believed Mr Ivey had cheated by “edge sorting”.

Punto Banco is not normally a game of skill.  The different odds applied to certain bets mean that the casino enjoys a small advantage, taken over all the play.  In Punto Banco at Crockfords it was 1.24% if the player wins and 1.06% if the banker wins.

“Edge sorting” is possible when the manufacturing process of playing cards causes tiny differences to appear on the edges of the cards so that, for example, the crop of the pattern on the back of the card which is seen along the edge of one long side is marginally different from the crop of the pattern seen on the edge of the other.  It is possible for a sharp-eyed person sitting close to a card shoe (the holder that dispenses the playing cards) to see which long edge it is.  This information becomes useful only if things can be arranged so that the cards that the gambler is most interested in are all presented with one long edge facing the table, whilst all the less interesting cards present the other long edge.  Then, the gambler knows which kind of card is next out of the shoe.  Using edge sorting to identify high value cards in Punto Banco will give the player a long-term edge of about 6.5% over the house if played perfectly accurately.

On 20 and 21 August 2012, Mr Ivey and his associate, Ms Sun, played Punto Banco at Crockfords.  Mr Ivey openly admitted to the use of edge sorting and working with Ms Sun to trick the croupier into arranging the cards so that the “good” cards ended up being presented with one long edge facing him.   Mr Ivey’s total winnings over the two days was £7.7 million.

Nine days after play, Crockfords told Mr Ivey they would not pay his winnings because the game had been compromised.  The High Court held that Mr Ivey’s use of edge sorting was cheating.  The Court of Appeal upheld this finding.  The Supreme Court has now unanimously dismissed Mr Ivey’s appeal.

The appeal raised questions about the meaning of the concept of cheating at gambling and the relevance of dishonesty to that concept.

An essential element of Punto Banco, the Supreme Court said, is that it is a game of pure chance.  Mr Ivey had staged a carefully planned and executed sting.  If he had secretly gained access to the shoe of cards and personally re-arranged them that would clearly be considered cheating, the Supreme Court said.  He accomplished the same results by directing the actions of the croupier and tricking her into thinking that what she did was irrelevant.  Mr Ivey’s actions were positive steps to fix the deck and therefore constituted cheating.

In civil actions the law has settled on an objective test of dishonesty, the Supreme Court said. The fact-finding tribunal must ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts and then determine whether his conduct was honest or dishonest by the (objective) standards of ordinary decent people.  There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.

If cheating at gambling required an additional legal element of dishonesty, it would be satisfied in this case, the Supreme Court said.  Accordingly, the appeal was dismissed.  (Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67 (25 October 2017) — to read the judgment in full, click here).