Cheats never prosper – and certainly not when a casino withholds their £7.7m winnings…

Guest post by: Tom Sumner

Back in July, Michael wrote a piece on the interesting case involving Phil Ivey and Crockfords casino.

Ivey had taken a civil case all the way up to the UK Supreme Court (the UK’s highest court) after Crockfords refused to pay out his £7.7m Baccarat winnings, claiming he cheated.

The Supreme Court has just ruled in the case, and found in favour of Crockfords.

The judgment comes as no surprise to me. I spoke at length with Michael about the case, and fully predicted that Ivey would be unsuccessful. Why? Quite simply, the fact that he cheated. I fully concede it was an ingenious and relatively “benign” form of cheating (no security guards were duct-taped, no elaborate wiring devices were strapped to his leg, yes I have watched Casino too many times), but it was cheating nevertheless.

So why do I think Phil Ivey cheated?

Ivey and his associate, Cheung Yin Sun, engaged in a type of advantage play called “edge-sorting”. You can read all about that here. However, I have no issue with edge-sorting by itself. The key point is that for his edge-sorting to be most effective, Ivey used a supposed “superstition” to persuade the croupier to rotate the most valuable cards.

That was what gave him the edge, and for reasons set out below, it’s this interaction with the croupier that led to the Supreme Court’s verdict.

By way of background, while “cheating at gambling” is a specific criminal offence under the Gambling Act 2005, this was not the precise point at issue here. Ivey was not prosecuted. This was a civil (i.e. non-criminal) claim brought by Ivey. The withholding of winnings by Crockfords based on the act of cheating boiled down very simply to an English common law point that a gambling contract contains an implied (i.e unwritten) term that no party to it will cheat.

That, I think we can all agree, is fair enough.

But what exactly is cheating? Didn’t Ivey just use his skill and ingenuity to work the system in his favour?

The Supreme Court rightly said that “it would be unwise to attempt a definition of cheating”. Such a wide-ranging offence, with its various civil, criminal and moral connotations clearly can’t be condensed into a quick term of reference.

While cheating was understandably not defined by the Court, and is not properly defined in the Gambling Act (which essentially defines “cheating at gambling” as “cheating at gambling”), there is an example given in the Gambling Act which was used as a helpful reference point in the Ivey case. It’s contained in section 42(3)(a) and states:

Without prejudice to the generality of subsection (1) cheating at gambling may, in particular, consist of actual or attempted deception or interference in connection with—

(a) the process by which gambling is conducted

While section 42(3) relates to the criminal offence of cheating at gambling, which was not the issue at stake here, clearly this is a relevant and influential legislative point when dealing with the common law meaning of what amounts to “cheating (at gambling)”.

In its judgment, the Court noted that “in ordinary language cheating need not involve deception, and section 42(3) recognises this. Section 42(3) does not exhaustively define cheating, but it puts beyond doubt that both deception and interference with the game may amount to it”.

Accordingly, in light of section 42(3), “cheating” at gambling need not necessarily involve being particularly deceptive or dishonest. However, when you “interfere with the game”, you run the risk of committing it. Ivey actively (and misleadingly, you could argue) interfered in the ordinary course of the game, and in doing so gained his advantage. So, while Ivey claimed to employ nothing more than a “legitimate Advantage Play technique”, the Court disagreed and found in Crockfords favour.

Interestingly, while per the above the Court did conclude that dishonesty was not an essential ingredient in the act of cheating at gambling, it did add that if the offence had required “an additional legal element of dishonesty”, it would have been satisfied by Ivey’s behaviour.

Conclusions

Despite my fairly stark assessment above (which is, I should stress, in conformity with some of the finest legal minds in England!), I confess to having some sympathy for Ivey on this one. He was largely transparent in his behaviour and certainly did not do anything sinister. You are allowed to interact with the croupier and on that basis you can see his argument that he did nothing more than utilise the tools presented to him by the game itself.

However, his clear manipulation of the croupier, not least given his misleading reference to “superstition” as the basis for it, is in my view a step too far. He actively tampered with the game’s mechanics, and that in my view falls foul of the provisions of section 42(3) and the clear statement that “interference in… the process by which gambling is conducted” can amount to cheating.

Vehemently disagree?!

This is clearly one that’s going to divide opinion (it heavily exercised a number of the top legal minds in the UK for several months), and it’s a fascinating debate. I’d be very interested in anyone else’s take…

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Tom Sumner
A qualified UK lawyer and gambling industry observer, Tom is a veteran of the UK travel blog scene, and a founder of new UK loyalty travel site UKtravelpoints.com. Check it out on its 1 November launch – while his thrifty mindset will continue to ensure your travel bill is reduced and experience improved, he’s also going to make sure you enjoy the process a lot more.