Neutral Citation Number: [2014] EWHC 3394 (QB)
Case No: HQ 13 X 05873
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Wednesday, 8th October 2014
Before:
MR. JUSTICE MITTING
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Between:
PHILLIP IVEY Claimant
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GENTING CASINOS UK LIMITED
T/A CROCKFORDS CLUB
Defendant
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MR. RICHARD SPEARMAN QC and MR. MAX MALLIN (instructed by Archerfield
Partners LLP) for the Claimant
MR. CHRISTOPHER PYMONT QC and MR. SIWARD ATKINS (instructed by Kingsley
Napley LLP) for the Defendant
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Approved Judgment
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Digital Transcription of Stenographic note by Marten Walsh Cherer Ltd.,
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MR. JUSTICE MITTING:
1. The claimant is a professional gambler and a citizen of the United States. He is
acknowledged to be one of the world's finest Poker players, a game which requires
high mathematical ability and stern discipline. He also plays Blackjack, Craps,
Roulette and Baccarat, in particular the variant known as Punto Banco, against
casinos. Each of these games has a so-called "house edge" which means that played
over a longish time the house should beat the individual punter.
2. The claimant's principle is, by a variety of techniques, to reverse the house edge and
play at odds which favour him. He does so by means that are, in his opinion, lawful.
He is what is known, in particular on the other side of the Atlantic, as an "advantage
player". He is jealous of his reputation and is adamant that he does not cheat. His
principle is to find and apply accurately "a legal way to beat the house".
3. He has given evidence in this case and been cross-examined at moderate length. I am
satisfied that he is a truthful witness. He gave his answers directly and did not seek to
explain away aspects of those answers that might damage his case. His frankness has
meant that my task in describing what occurred is much easier than it otherwise would
have been and it has reduced the need for me to refer extensively to sources of
evidence other than his own to set out what happened.
4. Punto Banco is a variant of Baccarat. It is not normally, to any extent, a game of skill.
Eight decks or, in English nomenclature, packs, sometimes six, of 52 cards are dealt
from a shoe, face down by a croupier. She deals the cards in a sequence from which
no deviation is permitted to two positions on the table in front of her, marked
"player", the "Punto" in the name, and "Banker", "Banco": one card to player, one to
banker; a second to player and a second to banker. In prescribed circumstances she
must deal one further card, either to player or to banker or to both.
5. The basic object of the game is to achieve, on one of the two positions, a combination
of two or three cards which, when added together, is nearer to nine in total than the
combination on the other position. Aces to 9 count at face value, 10 to King inclusive
count as nothing. Any pair or trio of cards adding up to more than 10 requires 10 to
be deducted before arriving at the counting total. Thus 4 plus 5 equals 9, but 6 plus 5
(which equals 11) equals only one.
6. Punters bet before any card is dealt and can bet on player or banker. Winning bets are
paid at evens on player, and at 19 to 20 on banker. It is possible to bet on a tie. In the
event of a tie, all bets on player or banker are annulled, in other words, the punter
keeps his stake and the only bet paid out on is the tie at odds set by the casino of
either eight to one or, at Crockfords, nine to one. It is possible to place other types of
bet, but this case does not concern them and it is unnecessary for me to describe them.
7. The house edge in Punto Banco is 1.24% if player wins and 1.06% if banker wins.
The counter intuitive difference is accounted for by the different rules which apply to
drawing a third card for player or banker. The play of each sequence of two or three
pairs of cards is known as a "coup".
8. Before play begins, the cards are cut to eliminate a proportion of the shoe from those
to be played. The cut is effected by placing a blank divider between the bulk of the
shoe and the remaining cards. Traditionally, seven cards out of 416 were cut from the
shoe, but some casinos routinely eliminate more, typically about one deck of 52 cards.
The croupier can deal a fresh shoe of cards as each is exhausted, or, after reshuffling,
reuse the same cards.
9. The claimant aided by another professional gambler, Cheung Yin Sun (Ms. Sun),
played 15 shoes of Punto Banco at Crockfords Club in Mayfair on the afternoon and
night of 20 to 21 August 2012 and on the afternoon of 21 August. He won just over
£7.7 million. There is no dispute about the means which he used to achieve that win,
a technique known as "edge-sorting".
10. A deck of 52 playing cards is manufactured so as to present a uniform appearance on
the back and a unique appearance on the face. The backs of some cards are, however,
not exactly uniform. The backs of many packs of cards for social use have an obvious
top and bottom, for example, the manufacturer's name may be printed once only, or
the pattern may be obviously the right way up and upside down. In casino games in
which the orientation of the back of the card may matter, cards which are in principle
indistinguishable whichever way up they are when presented in a shoe are used.
Cards with no pattern and no edge present no problem, they are indistinguishable.
However many cards used in casinos are patterned. If the pattern is precisely
symmetrical the effect is the same as if the card is plain: the back of one card is
indistinguishable from any other. But if the pattern is not precisely symmetrical it
may be possible to distinguish between cards by examining the backs.
11. "Edge-sorting" is possible when the manufacturing process causes tiny differences to
appear on the edges of the cards so that for example, the edge of one long side is
marginally different from the edge of the other. Some cards printed by Angel Co.
Limited for the Genting Group (which owns Crockfords) have this characteristic. The
machine which cuts the card leaves very slightly more of a pattern, a white circle
broken by two curved lines, visible on one long edge than on the other. The
manufacturers assert that this is not a defect but is within a contractually specified
tolerance of up to 0.3 millimetres. Before a card is dealt from a shoe, it sits face down
at the bottom of the shoe, displaying one of its two long edges. It is possible for a
sharp-eyed person sitting close to the shoe to see which long edge it is. The
information thus gained is only useful to the punter if he knows or has a good idea of
what the card is.
12. In Punto Banco cards with a face value of 7, 8 and 9 are high value cards. If one such
card is dealt to player or to banker, it will give that position a better chance of winning
than the other. Thus a punter who knows that when the first card dealt, always to
player is a 7, 8 or 9, he will know that it is more likely than not that player will win.
If he knows that the card is not a 7, 8 or 9, he will know that it is more likely than not
that banker will win. Such knowledge, it is agreed, will give the punter a long-term
edge of about 6.5% over the house if played perfectly accurately.
13. According to Dr. Jacobson, a former Professor of Mathematics, currently an expert
adviser to the gambling industry, the house edge on any particular coup varies and is
not precisely the long-term edge thus described. It may be between 4.5% and 7%,
using the edge-sorting technique which I have described. I accept his evidence.
14. Three conditions must occur before the punter can gain that knowledge: (1) the same
shoe of cards must be used more than once; (2) cards with a face value of 7, 8 or 9
must be turned through 180 degrees by comparison with all other cards; (3) when
reshuffled no part of the shoe must be rotated. Step (2) is the process known as
edge-sorting.
15. As the claimant frankly, and without hesitation, admitted, if the casino realises that
cards with a face value of 7, 8 or 9 are being turned, it will take one or more of the
simple steps needed to avoid giving the punter an advantage: by covering the base of
the shoe so that the leading edge is not visible before bets are placed; by only using
one shoe of cards; or by turning a significant proportion of the cards when reshuffling.
It is therefore essential for edge-sorting to work that the croupier does not realise that
cards with a face value of 7, 8 or 9 have been differentially sorted unless of course she
is complicit, of which there is no suggestion in this case whatever. Two people can
rotate the cards -- the punter or the croupier. If the punter touches the cards, most
casinos will not permit that shoe to be reused. That is Crockfords' invariable practice.
16. For edge sorting to work at Crockfords it is therefore essential that the croupier is
persuaded to rotate the relevant cards without her realising why she is being asked to
do so. Casinos routinely play on quirky and superstitious behaviour by punters. It is
in the casino's interests that punters should believe, erroneously, that a lucky charm or
practice will improve their chance of winning and so modify or defeat the house edge.
Consequently a wide variety of requests by punters, particularly those willing to
wager large sums on games which they must in the long run lose, are accommodated
by casinos without demur or surprise.
17. All of the games of Punto Banco played by the claimant and Ms Sun on 20th and 21st
August 2012 were captured on CCTV, mostly with contemporaneous audio recording
as well. The moment at which they persuaded the croupier, Kathy Yau, to rotate the
cards was at 9 p.m. on 20th August. It has been captured on video and the words
spoken have been transcribed. Before then the claimant and Ms Sun had played part
of four shoes, the first two plain backed, and the second two Angel cards but with no
asymmetry on the back.
18. The claimant is a high stakes gambler. He began, by his standards, modestly: bets
placed on those four shoes ranged from £4,000 to £75,000 per coup. He was losing.
At 8.56 he requested a new shoe of cards. A new shoe was produced. The cards were
blue Angel cards with the rounded pattern which I have described on the back. At
8.57 the claimant asked Jeremy Hillier, the senior croupier overseeing the game: "If I
win, can I say I want the same cards again?" to which Mr. Hillier replied he could,
"because he was not bending them". The claimant had in fact avoided touching the
cards from either the first or second shoe onwards.
19. The croupier, Kathy Yau, then put the cards face down in blocks on the table to make
the cut. She cut the cards so as to exclude about one deck from play. The claimant
asked about the cut: "Why so big?" Ms Sun said: "They don't cut the seven cards", a
reference to the traditional cut of seven cards from the end. Ms Yau asked if he
wanted her to cut seven cards, to which he replied "yes", he wanted to play ninety
hands, slightly more than the maximum likely to be possible with an eight-deck shoe
with a seven-card cut. MR. JUSTICE MITTING
Approved Judgment
Ivey v Genting Casinos UK Limited
20. Mr. Hillier asked the gaming manager, Louise Bennett, also present in the room if she
could. She must have signified assent off camera, because Mr. Hillier said "yes".
Ms Yau then dealt the first coup. Player won. Ms Sun then asked Ms Yau in
Cantonese to do it, in other words turn the cards over so that the face showed, slowly.
Ms Yau said "yes". Ms Sun then asked her again in Cantonese to turn the cards in a
particular and differential way as they were being exposed and before they were put
on the pile of used cards. "If I say it is good, you turn it this way, good, yes? Um, no
good.” (A slightly different sounding um). Ms Yau did not immediately understand
what was required. She asked, "so you want me to leave it?" To which Ms Sun
replied, "change, yeah, yeah, change luck". Ms Yau, "what do you mean?" Ms Sun
gestured how to turn it. "Turn it this way". Ms Yau, "what, just open it? Yeah".
Ms Sun, "um", signifying good in Cantonese. On that coup, banker won.
21. The claimant then chipped in, "yeah, change the luck, that's good. Anything to
change the luck, it is okay with me." Ms Sun reiterated her request in Cantonese, "if I
say it is not good, you turn it this way. If it is good, turn it this way, okay?" To
which Ms Yau said "okay". When she turned over the cards of the second coup,
Ms Sun said of four of them, "good", and of one, "not good", in Cantonese, Ms Yau
did as requested and turned the "good" cards over, end to end and the "not good" card
over side to side. In consequence, the long edge of the "not good" card was oriented
in a different way from the long edge of the "good" cards.
22. This procedure was followed for each of the next 79 coups dealt from this shoe. The
maximum amount staked by the claimant on the coups towards the end of the shoe
reached £100,000. Self-evidently at no time during the play of this shoe did he derive
any advantage from the rotation of the cards requested by Ms Sun because that
occurred at the end, not at the beginning, of each coup.
23. At 10.03 p.m., when the shoe was exhausted, the claimant said that he had won with
that deck, and said he would keep it. Mr. Killeen, who had brought in a new deck of
cards was told by the claimant he did not want them, he "had won £40,000 with that
deck", Mr. Killeen said there would be no problem. The original deck was reused.
The defendant has not been able to calculate retrospectively whether that assertion by
the claimant was true.
24. Before it was reused it had to be reshuffled. The claimant had earlier asked at about
6.10 p.m. Ms Yau's predecessor as croupier for a shuffling machine to shuffle the
cards. The cards were reshuffled by a machine. For a punter using the edge-sorting
technique this ensured that the shuffle would be effected without rotating any of the
cards unless the croupier did so before they were put into the machine. Ms Yau did
not rotate them.
25. Play with the reshuffled shoe recommenced at 10.12 p.m. and continued until Ms Yau
went for a half hour break at 10.31 p.m. The claimant did not play during her break
but resumed when she returned until 3.57 a.m. on 21st August. Ms Yau was the
croupier throughout, the claimant's stake increased to £95,000 and then to £149,000
per coup. He won approximately £2 million.