This seems like a ruling unlikely to stand up on appeal. This technique is akin to card counting, where skill is combined with luck to create a long term advantage.
I also think it should have been fairly obvious to the casino employees that some kind of advantage play was happening. Ivey is very well known as a poker player, and while he also is known as a gambler, arbitrary superstitions are outside of his character. The specificity of the conditions he asked for should have tipped his hand earlier than they did, but the casinos probably treated him like any other baccarat whale.
Hopefully this decision is reversed. I don't know what part of the law it supposedly broke, but it seems like the judge believes that the player in the casino has a legal obligation to be a sucker.
> I don't know what part of the law it supposedly broke, but it seems like the judge believes that the player in the casino has a legal obligation to be a sucker.
I went and had a go at the New Jersey Casino Control Act and I believe that the judge is saying that Ivey violated 5:12-114(2), which states: "It shall be unlawful for any person playing any licensed gambling game knowingly to use bogus or counterfeit chips or gaming billets, or knowingly to substitute and use in any such game cards or dice that have been marked, loaded or tampered with." (Internal punctuation omitted.)
He's not saying that Ivey had to just blithely take whatever happened; instead, I think the judge is making the argument that Ivey "rigged" the cards to function just like marked cards so they should be treated as such. He's not saying that Ivey committed a crime, just that the game was unlawful under the NJ CCA because the NJ CCA prohibits the use, by either party, of cards that seem to be marked. The law doesn't make a distinction as to who is using the cards or who did the marking, even if the marking is done by the manufacturer.
"a. It shall be unlawful: ... (2) Knowingly to deal, conduct, carry on, operate or expose for play
any game or games played with cards, dice or any mechanical device, or any
combination of games or devices, which have in any manner been marked or
tampered with, or placed in a condition, or operated in a manner, the result of
which tends to deceive the public or tends to alter the normal random selection
of characteristics or the normal chance of the game which could determine or
alter the result of the game.
b. It shall be unlawful knowingly to use or possess any marked cards,
loaded dice, plugged or tampered with machines or devices." [1]
EDIT:
The Judges opinion [0] also makes it clear that he is following the precedent set in Golden
Nugget v. Gemaco, Inc. [2], where it was ruled that a game was voided because the casino accidentally used unshuffled decks. More specifically, without assigning fault to any party, the court argued that the game was not authorized into the Casino Control Act, thereby voiding the contract.
In this case, the judge argues that, although the specific statute of the CCA that was violated is different, the difference is not relevent to the arguement set forth in Golden Nugget, so the same result applies.
If the judge considers the cards to be marked because of manufacturing flaw that made the cards not perfectly symmetrical, then that manufacturing flaw would be present in all the casino's card games, rendering them all invalid and illegal and opening up the casino to lawsuits for return of losses from illegally operated games, which were illegal essentially because of a technicality. This would likely result in the casino going bankrupt.
If the judge considers the cards to be marked because they were rotated, then the judge has effectively outlawed a consensual agreement between the casino and the player regarding game conditions, which is neither in the spirit not the letter of the referenced law. True, the player exploited information asymmetry because he was aware of information that the casino was not, but that's a perfectly acceptable advantage which casinos exploit all the time when they don't explicitly explain to casual players how the rules of their games mathematically guarantee a house advantage over the long term.
Oh, so that's even more clear than what I thought. I didn't see that citation, my apologies. In that case, I agree even more with the judge's decision: a member of the public would not expect the meaning of the cards to be able to be "divined" by another player at the table in such a manner and the casino, had it known of the flaw, would not have used the cards, and Ivey undoubtedly used the mechanism to alter the result of the game and affect his actions based on the "random" selection.
I disagree with the people in this thread who say that the judge expects Ivey to be a patsy.
2) is about operating or exposing a game with marked cards. So it forbids the house to use those cards, I don't read it as a criminal act for the player to play against a house which uses such cards.
Also I think b. is about the house: it is about owning or using such cards. The cards where not Iphy's, the casino was the owner and the one that was using them.
But apart from that, just imagine what the implications are if this verdict is correct. Imagine that you walk into a casino and play a card game, and you see that the dealer is consequently making a mistake so that the result of the game is not random anymore. The verdict is saying that you are still allowed to play, but only if you choose a losing strategy. If you would choose to turn this knowledge of the dealer's mistake in your advantage, you would commit a crime .. ?
>The verdict is saying that you are still allowed to play, but only if you choose a losing strategy.
This is not my reading of the decision. Rather, my reading of the opinion is that, regardless of if you take advantage of it or not, the game is no longer authorized under the Casino Control Act, and therefore is void.
Note, it is not clear to be that any "crime" was commited in this case. Rather, the ruling was that the game was invalid and therefore the appropriate solution was to return the parties to the state where they were in prior to playing the game. The precise wording (quoted from Golden Nugget) is:
"“Since the
rescission of a contract essentially voids the contract, it
follows that the remedy used in situations of rescission should
be used in situations of voidance. Thus, since the contracts
entered into here are void, returning the parties to their
position prior to the formation of the contracts is the
appropriate remedy.”"
Interestingly, in the Golden Nugget case, it was clearly the casino who made a mistake (failing to use a shuffled deck).
"The CCA isn't fault based, according to the judge, who explained that it's irrelevant whether the casino or the players are to blame for the mishap. It only matters whether the mini-baccarat game was authorized under the CCA, which it wasn't, the judge said." [0]
> my reading of the opinion is that, regardless of if you take advantage of it or not, the game is no longer authorized under the Casino Control Act, and therefore is void.
If this is true, it means that any game ever played with those 'marked' cards is void. Since Baccarat is a winning game for the casino, it would mean that this verdict could cost the casino many times more than what it has won against Phil Ivy.
Maybe I'm too cynical, but I don't believe that anyone who will now start a court case to claim his money back from a game with these cards has even the slightest chance to win. Surely the judge will find a way to interpret the law text in another way so that it again favors the casino.
The "marking" in this case is not inherent in the cards; but is rather a combination of an assymetry in the cards, and the dealer rotating a non-random subset of the cards (thereby turning the assymetry into a "marking").
Further, in order for a marking to count, it has to "tends to deceive the public or tends to alter the normal random selection of characteristics or the normal chance of the game which could determine or alter the result of the game." If the only mistake that the dealer makes is some form of an information leak, and no one modifies their behavior based on the information being leaked, then this condition would not be met.
If, instead, the dealers mistake changed the odds of the game regardless of if the player acted on it, the this clause would be invoked. Indeed, this is likely the intended case of this clause, as the alternative is that the house can cheat.
Do you really think that a losing gambler would be able to bring a suit against a casino because a dealer placed cards in a slightly uneven way that seemed suggestive to the gambler and caused him to make sub-optimal bets? Even if it could be shown that the dealer had studied the psychology of cards for that very purpose?
The problem is that the jugde is trying to read the case two ways at the same time. Golden Nuggets argument was that a non shuffled deck removes the chance element, therefore the game wasn't governed by CCA at all. If you're pointing at a section of CCA and telling somebody they breached it, then by definition you're saying the game falls under the conditions of that act, and the remedy must therefore also be the one defined in that act (CCA 5:12-115(c) specifies for a $50,000 fine for an individual).
There was no criminal ruling in this case. The ruling is that the implicit contract of the game was voided, according to the Casino Control Act. Returning the funds is just unwinding the executed contract.
You'll note that there are not even any punitive penalties being applied. Only the money earned during the game is to be returned.
Sure. After they show that the casino knowingly used marked cards to gain advantage against them, as the casino did vs Ivey. Which I'm not even sure is possible in Baccarat, since my understanding is that it's a purely mechanical game from the house perspective, like Blackjack. As in, any choices made by the house are dependent only on information that is witnessed by all players.
In that case anyone who lost a game of baccarat (or any card game) played with those type of cards at anytime in NJ has a case against the casino and could sue to get the money back because the contract was illegal. I wonder if those are standard cards used at the casino ... they do offer them as souvenirs so it seems like they might be. If they are used by the casino or other casinos for games, that's probably thousands of games and potential court cases. Sounds like a class action lawsuit actually.
My reading of that is that at least one party has to knowingly use the marked cards. If neither party is aware that the cards are not symmetrical, there is no unfair advantage and the game is fair.
Well it's irrelevant in this instance since the exploit used by the gambler and the woman required the dealer to rotate and leak information about the cards. The cards themselves did not seem to be enough for the gambler Ivey to exploit the system, they needed to be rotated.
Now if any other player performed such a task, sure, they're probably able to make a case too. But not every baccarat player met the criteria in this case.
But seeing as the cards then are identical to other cards they're using, can they still be considered marked? That's what I mean, they're either marked or not.
Consider a deck of cards that has a triangle printed on the back. This triangle is printed exactly the same on every card, such that they are all indistinguishable from each other.
Now rotate some of the cards 180°. Those rotated cards are now distinguishable from the other cards, because the card print is not rotational-symmetric. This rotation is what caused the cards to be marked, even though the printed pattern was exactly the same.
Typically card backs are rotational-symmetric in order to avoid this. However, it seems like this particular pattern had imperfections -- within 1/32 of an inch -- which a trained eye could recognize. (The judge even admitted this as quite a feat.)
I understand technically how it worked, I'm merely arguing that their interpretation of "marked", and also their interpretation of the party doing so is quite liberal, at least for a courtroom.
The player (Ivey) did not bring, substitute, touch nor coerce the casino into doing anything with the cards. His assistant asked the dealer to flip some cards and he abided willingly, supposedly on behest of the casino to accomodate a whale. They did nothing under the table.
Like most people on here IANAL, but this ruling doesn't seem right, where "right" is the letter of the law.
I think the wording of the law is very broad, and "marked cards" is only one of the conditionals listed. Since you seem to be taking a very strict definition of "marked cards", other conditionals of the law were also met:
> Knowingly to deal, conduct, carry on, operate or expose for play any game or games played with cards, dice or any mechanical device, or any combination of games or devices, which have in any manner been marked or tampered with, or placed in a condition, or operated in a manner, the result of which tends to deceive the public or tends to alter the normal random selection of characteristics or the normal chance of the game which could determine or alter the result of the game.
Specifically, it seems like the cards were "placed in a condition" and "operated in a manner" which "alter[ed] the normal chance of the game" for Ivey and Sun.
They were marked when Ivy's assistant asked to turn the 9s around 180 degrees.
The design on all the cards was identical; it's not as though face cards had a different pattern on the back. The design just happened to be very slightly asymmetric so that turning the 9 cards served to mark them.
If you were not able to turn the cards, the asymmetric back would provide no information.
If I was caught carrying marked cards nobody would believe I didn't know. The casino has an entire anti-fraud department which exists to catch this sort of thing and we're supposed to believe they didn't notice this for years...
But that's only half the post you linked to... Importantly, the precedent involving the unshuffled deck didn't involve knowledge. Despite everyone's intentions the game was not setup correctly so it didn't count.
If so, then these games (all games with these decks) were also not setup correctly. Either all games with these cards are improper or none are.
And importantly, nothing other than penalizing the casino will change anything. This ruling incentivizes them to leave marks in their cards, dice, etc, and call them out in the future to invalidate any unpleasant results.
Considering that the imperfections were on the order of 1/32 of an inch, or 0.8 millimeters... Yes, I can absolutely believe that they were missed on visual inspection.
But that segment of the law is not MEANT to be an injunction against the players, but a regulation on the casinos. On appeal, the correct decision would be for the appeal judge to not require Ivey to pay back any restitution, and instead fine the casino for playing with marked cards (whether or not they knew they were marked).
In Baccarat, the only variable is the stake - neither player nor dealer can influence the cards which are drawn, so the result is unchanged. Even if it hadn't been a private table, no other players could possibly have been impacted by Ivey's play. The result can't be determined or changed by seeing a single card, although the odds certainly were.
I've made a longer post explaining why I don't believe this judgment was correct, but suffice to say, you can't choose half a sentence of a law and decide that because that bit fits, your case is made.
The (a) part of that law is written for casinos, not players, as it refers to dealing and operating games. The requirement is that they do this knowingly. The casino didn't know.
The operation of this game did not in any way deceive the public. No player was tricked. The operation of the game also did NOT alter the result of the game. The same side (banker/player) would have one irrespective of the rotated cards, as the rotation has no affect on gameplay and the outcomes are deterministic (no choices during play like in blackjack).
All that was changed as a result of the extra knowledge was which side to bet on. The game itself was not affected in any way.
> c. Any person who violates this section is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $50,000, and in the case of a person other than a natural person, the amount of a fine may be up to $200,000.
This para seems to say that it applies to any person, including corporate persons.
I still think this was the wrong opinion. If the cards are not shuffled that is a clear violation of the rules of the game. No such violation occurred here.
There are no such rules about card orientation because usually casinos use ones with symmetrical backs.
Casinos use cards that they hope have symmetrical backs. In this case they were not symmetrical. Now who's fault is that? The player didn't bring the cards to the table, the casino did. If they want to cry foul and say those games are void so they don't have to pay out $10M, how much do they have to give back to players who used those same cards? They can't have it both ways. Were the games that were played with faulty cards valid or not? If not, time to start refunding a lot of money.
It's not that the cards were marked because they were asymmetrical, it was the combination of the asymmetry and Sun manipulating them that caused them to be marked. So other games with those cards are fine as long as none of the players were manipulating the game so that asymmetry gave them an advantage. The player didn't bring the cards, but they did purposefully manipulate them to effectively play a game with marked cards, and that's why the game wasn't legit.
"The Court found that Ivey and Sun breached their contract with Borgata to play Baccarat in compliance with the CCA by violating N.J.S.A. 5:12-115(a)(2) and (b) when they knowingly engaged in a scheme to create a set of marked cards and then used those marked cards to place bets based on the markings."
That's the finding I disagree with, and seems to be the point that the entire judgment rests on.
Section 12 of the act [1] falls under "Sanctions", which to me is the first clue that this section is intended to apply to the casino, not the customer. I do concede that the wording "any person" would also include customers.
Let's take a look at 5:12-115(a)(2) and see if we can narrow down exactly what Ivey and Sun are supposed to have done here:
"It shall be unlawful...knowingly to deal, conduct, carry on, operate or expose for play any game or games played with cards, dice or any mechanical device, or any combination of games or devices, which have or tampered with, or placed in a condition, or operated in a manner, the result of which tends to deceive the public or tends to alter the normal random selection of characteristics or the normal chance of the game which could determine or alter the result of the game."
Well they certainly didn't deal, operate or expose the cards to play - the casino did that. There is an argument that without players, the game can't exist, so let's accept that both parties are responsible for "conducting" and "carrying on" the game.
The cards were weren't tampered with - they were imperfect, but is that the same as "marked"? I don't believe so, and I think the judges assertion that they are should be challenged on this. Regardless, "Placed in a condition, or operated in a manner" does seem like a reasonable way to describe the rotation of specific cards. The CCA makes no assumption or distinction about who places or operates them, so we don't need to get into whether it was the casino or the player who did this. It happened and that's enough.
Strip out the bits that Ivey/Sun can't possibly have done and we're left with this:
"It shall be unlawful...knowingly to conduct [or] carry on any game or games played with cards, which have in any manner been marked, or placed in a condition, or operated in a manner, the result of which tends to deceive the public or tends to alter the normal random selection of characteristics or the normal chance of the game which could determine or alter the result of the game."
So, to the result. The use of the words "tends to" means that it doesn't matter that it's a private room with no public to be deceived. The question the law asks as it applies to this case is:
Given that Baccarat has a predetermined result at the time of dealing (there is no option for either player or dealer to influence the cards which will be drawn in the course of the game - the only variable is the stake), does the act of rotating a card, without changing its position in the deck:
- tend to deceive the public? I don't see how it possibly can.
- OR tend to alter the normal random selection of cards? Certainly not.
- OR tend to alter the normal chance of the game which could determine or alter the result of the game? It can't alter the result. It can't determine the result - there are still three to five cards which are entirely chance. It DID alter the normal chance of the game in this case, but does it "tend to"? From the article: "Baccarat is a casino game well known for unique and superstitious rituals," Hillman noted in an October opinion. "Thus, Sun telling the dealer to turn a card in a certain way did not raise any red flags for Borgata." That suggests to me that it does not "tend to" affect the chance, which is the test required by the law.
On the argument above, I would suggest that Ivey and Sun were not in breach of 5:12-115(a)(2) at all. 5:12-115(b) simply says "It shall be unlawful knowingly to use or possess any marked cards, loaded dice, plugged or tampered with machines or devices." They didn't posess them, and I don't believe using the casino's standard cards, which meet the casino's own quality requirements, can be considered to be using "marked" cards. If they are, and the casino are still using the same cards, they're now knowingly in possession of marked cards themselves.
Then we get to 5:12-115(c):
"Any person who violates this section is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $50,000, and in the case of a person other than a natural person, the amount of a fine may up to $200,000."
The Golden Nugget case hinged on the point that the deck wasn't shuffled. Since the CCA requires random decks, it has no provision for games played with a non-random deck. The argument is that because the CCA made no provision for the game, it can't have been a legal game under the CCA, and therefore it should be void. This case is completely different - even if we accept that Ivey breached the CCA, the CCA already makes provision for such a breach, and specifies the appropriate remedy should it occur.
There's also the small point that the DGE has investigated the Golden Nugget case and concluded that there was no breach of the CCA [2] - while it may not be a court decision, it should have some weight.
It looks to me like the judge has this very wrong, and any lawyer worth his money should be able to deal with it on appeal.
For the most part, I agree with your reading / interpretation, but IANAL. There's a slight missing piece however. Often the regulations that cover each game in a casino state that the game is concluded at the paying of bets. In this context the "result" referred to is not the result of the cards shown or the Banker / Player result that are the two outcomes of Baccarat. It is the paying of the bets that is the result. If this interpretation is implied here, perhaps this would come up against Ivey.
Bet placement and payment are all functional parts of a casino game. You can't ignore them when reading the regulations. If Ivey placed bets differently than he otherwise would have, then the game was affected.
But the section of the CCA Ivey is accused of breaching makes no allowance for whether or not any specific game was affected. It requires that the behaviour tends to affect the game, and given that the casino was happy to accommodate all requests and didn't see card rotation as anything more than superstition, I would argue that rotating a card would not tend to affect the game.
Even if it does, there is a specific penalty defined for breaching that section of the CCA, so it's not comparable to the Golden Nugget case.
> Specifically, it seems like the cards were "placed in a condition" and "operated in a manner" which "alter[ed] the normal chance of the game" for Ivey and Sun.
The law DOES make a distinction based on who did the marking. Your quote clearly states that it refers to people playing the game, which would exclude the casino.
The cards also weren't marked. The backs were identical. The dealer selectively rotating some cards is what made some identifiable.
The law also says that the player must "substitute and use" marked cards. The casino made the substitution. The cards were marked or tampered with.
Moreover, if this interpretation is correct, and the game is simply invalidated, then it is far more exploitable. In the case of any kind of marked card a player could simply bet huge (randomly) and if they lose invoke this law, invalidating the game.
As I mentioned in another reply, the particular clause referenced above is not what was used. However, your interpretation that the game was "invalidated" is correct.
This is not exploitable because it is within the casinos power to not use marked cards. Further, if the casino did use marked cards, and the player won; then the casino could invoke the same law and invalidate the winning.
This is essentially what happened in Golden Nugget v. Gemaco (the main precedent cited in this case); where the casino lost big as a result of using non-shuffled decks. Despite the fact that this was clearly the casino's fault, the court ruled that (regardless of fault) because the game was no longer authorized under the Casino Control Act, it was illegal, and any contract based on it was void.
If the cards are damaged or marked during play the deck is punched and disposed of. After a certain small number of uses, where normal card handling by dealer or players might mark there cards, there deck is punched and disposed of. I would be surprised if a big Vegas casino does not go through a shipping container of card decks every night.
Shipping containers are pretty big compared to a deck of cards, even a 20-footer. Looks like an average casino goes through on the order of 1,000 decks of cards a night.
wouldn't that same law then negate any and ALL winnings the casino has ever had from Baccarat, because anyone who has ever lost could come forward and counter sue them for breach of the same contract and there'd be no way to prove one way or the other, they'd have to nullify out all past/present games. I think it's best not to set a legal precedent, and for the casino to take their hit, and tighten up security of the game moving forward.
Right, but the casino has a great opportunity to rotate the cards in every game. Can you definitively state that the dealer never rotated one of your face-up cards after a hand?
We only have their word that they didn't know the deck was marked. They could have been cooperating in fraud for years. Let certain players win, especially against a troublesome high-roller. Save it to invalidate a huge win, etc.
It's improbable that their anti-fraud team didn't catch the issue because it's so obvious. Do a manual shuffle and fan the cards. 1/32nd of 2.5 inches is 1/80th of the width. Greater than 1%. I used to manually grade gems. In the beginning I could hardly tell 3mm from 4mm, in the end I could spot a 3.05 in a tray of 3s, and gems don't sit flush in your hand while you compare them. (At any rate, they will check after this, and mechanically I hope!)
The best way to deal with this is make the casino eat the loss. If they're innocent it'll teach them to be more careful.
Baccarat is a purely mechanical game from the house perspective. Even if the dealer had perfect premonition and telepathy, the behavior of the house would not change.
> Sun trained herself to identify aberrations along the left or right margins of the card backs, no wider than 1/32 of an inch, the Times reported.
Also, the imperfection was 1/32 of an inch, not 1/32 of the card width. Though the wording is ambiguous; it may be that the margin was 1/32 of an inch, in which case the imperfections within the margin were even smaller.
> Even if the dealer had perfect premonition and telepathy, the behavior of the house would not change.
Yes, but we can't say nobody cheated before because they could have done it silently. All we can say is that nobody caught this method before. As for the house's motive, perhaps the hypothetical dealer is helping a confederate win in the same way as in this story, but just to a lesser amount. This also isn't the only card game this would work in.
> the imperfection was 1/32 of an inch, not 1/32 of the card width.
Right, I said it wrong but that's where I got 1/80th from. And yeah, it would be a fraction of a millimeter. But with proper technique (such as is used to check for marked backs anyways) of riffling through them, you'd see the shape move around.
I also worked in something similarly finicky and know from experience that difference is easily within normal ability to spot.
Anyways, the point is that there are two parties who are possibly hurt by marked cards - the house and its customers. The customers don't get the opportunity to inspect the game pieces so the responsibility should fall fully on the house. If they had skin in the game they'd try harder. But if they can rollback customer wins with it, it becomes a feature. Why look too hard, if at all?
I guess he could go, play using the same mechanic (i.e. rotating cards to give him an advantage) but deliberately make losing bets. Then reveal that because of the rotations he could have won (I guess, show them that ke knew the card values and give an alternative series of winning bets he ought to have placed) therefore the game was unlawful, and demand his losses be returned.
Quite why he would do that is anyone's guess - trolling the casino for the lulz because he has millions of dollars he can afford to lose?
it's not clear to me whether cards with consistent patterns due to manufacturing process ought to be considered marked or not.
certainly Ivey and his colleague were able to utilize those patterns as if the cards had been marked, but in truth neither Ivey nor his colleague did anything to the cards at all before playing.
I think the argument comes down to spirit of the law (which Ivey broke, in my opinion) vs. letter of the law (which he didn't break, in my opinion).
He did request that the specific cards be substituted for whatever the regular ones are, and that according to the impossible rules on being "identical" (see http://www.flushdraw.net/news/borgata-fires-back-at-cardmake...) they were known to be effectively marked.
I enjoy "Robin Hood" stories as much as the next person, but if he had walked in with his own deck of cards and asked to use them (and the casino agreed) is the fault with the casino or the player?
Sun purchased a souvenir set of the purple Gemaco Borgata (with the punched hole) from the casino, so it sounds like these cards are in regular use by Borgata. Probably they use several different patterns, and Ivy requested this particular pattern for play.
See my other note below. He requested these specific cards, and that the dealer adjust specific cards, and that they use an automatic shuffler (so that they didn't change order). He may not have done so directly, but he caused them to be substituted which is likely more than enough (IANAL, but I deal with too many).
In the broader scheme of things, isn't the casino setting itself up for trouble? If someone lost significant money, can't they now file suit claiming the casino likely used a similar scheme to force the game in the casino's favor?
so the casino always uses these cards. Sun bought a set of the cards from that casino and studied them. Sun was also not a player, she was just the interpreter while Ivey was the better.
if the rationale of this case stands, then every past player at Borgata and the Attorney General and dealers should sue Borgata under the New Jersey Casino Control Act
If that fails then the New Jersey Casino Control Act should be challenged on constitutional grounds of unequal application of the law
Would love to see this case moved to federal jurisdiction, no federal judge is going to take a favorable view of New Jersey State's enshrinement of casino superiority.
>I also think it should have been fairly obvious to the casino employees that some kind of advantage play was happening.
There's an interesting side story to this. While Ivey was conducting this scheme at the Borgata, a famous advantage gambler named Don Johnson happened to be there at the same time. Johnson is mostly famous for beating Atlantic City casinos out of $15M playing blackjack using their overly generous rebate policies for the highest of rollers, though he has also made hundreds of millions of dollars beating horse racing using algorithms that he paid to have created. Bloomberg did a 45 minute video on him [1] and here's a writeup if you prefer [2]. Johnson and Ivey are friends.
When Johnson walked by the high limit room and happened to see Phil playing baccarat with piles of $100,000 plaques in front of him, accompanied by a woman that he normally wouldn't be with, he immediately knew that something wasn't right. He walked up and tried to talk to Phil, who told him "it's not a good time right now". Don said "au contraire my friend, I don't know what's going on but it looks like a great time" lol. Johnson actually sat down and, figuring that Ivey knew what he was doing, copied Ivey's bets until Ivey made it known that he was serious about being alone with his companion at the table. Johnson won but was not sued or asked to return the money. Johnson told this story on an advantage gambling podcast [3].
So yes, anyone that knew anything about Phil should have instantly known that he would not be playing a negative expectation game for such high stakes without an advantage. Having heard several gaming attorneys weigh in on this issue, I do believe that the current decision in the US will be overturned, although it is unlikely that the case in London will be.
Card counting is negated by using more decks and not going past 60% or whatever of the shoe. Casinos know about card counting. This is different. They spotted marks on the back of the cards that gave away the value of the cards. If the casino knew about this they would not have used those cards. The judge ruled that both the casino and the player are obligated to play the game by the rules.
Just to be clear the markings on the back didn't precisely give away the value of the cards. What they did do was allow Ivey to sort the cards into buckets (by flipping some cards 180 degrees) such that he could tell which of two buckets any given card was in based upon the markings.
> I don't know what part of the law it supposedly broke
I mean, that's a pretty important thing to know before forming an opinion on this matter.
In essence, the part of the contract that the judge is leaning on is that any manner of manipulation, by either party, invalidates the game and any winnings that came as a result of that game.
As a game designer, I find casino "games" frustrating, because they are designed to not only mitigate skill, but also luck, in favor of the house. The fact that the casinos have roped in John Law to steal back their winnings after they were taken fair and square is especially galling. If they were grown-ups, they would take their beating, ban Ivey and Sun for life, and change their processes to avoid being beaten again in the same way.
Agreed. Ivey and Sun played by the house's rules, the house lost, and now they're trying their damndest to change the rules ex post facto into something that suits them. I find this a brilliant exploit of baccarat and I smile when the house gets pwned by something they didn't quite expect within their own rules.
Borgata should probably be focusing their ire at Gemaco, not at Sun. Her skill is what won this, and I hope that in the end she gets her "revenge".
>As a game designer, I find casino "games" frustrating
It's funny -- I'm as vulnerable as anyone else to a million addictive game mechanics that build on the same impulses that make gambling addictive. But actual real-life casino slot machines just don't work. I need to be like, evaluating the loot drop's fire resistance on a new helmet or whatever for it to be addictive. When you just push a button over and over again with no actual input it's just too obvious you are doing nothing.
I've heard several reports that casinos can't get millenials to play slots, and I suspect it's because they're very unsophisticated compared to even the most basic video game.
Things have come full circle - slot machines paved the way for gamification techniques and IAP. Flashing lights, the sounds, the 'I almost won' near-misses from the big jackpot...all finely tuned to get that dopamine squirting and keep you on the machine. Very Pavlovian.
Video games (IAP in particular) are just rehashing the psychological tricks that slot machines have used for decades. Its just the games are newer and offer a bit more depth.
I'm sure in good time we'll see more advanced slot machines to entice the smartphone generation.
I'm sure in good time we'll see more advanced slot machines to entice the smartphone generation.
Certainly here in Sweden they've short-circuited that entire process by making the slot machines into smartphone apps so that you can play whenever you want without even having to leave the comfort of your own home
Under 35 casino-goer here. We go every couple months for the cheap booze, free non-alcoholic drinks, and live music. Our group all sits at one machine together and we take turns putting our $5 bills in. We just kinda drunkly chat while one person has a go at trying to win the cost of drinks back. It's pretty fun, cheaper than a bar and much more to do.
Don't most slot machines these days come with a bunch of extra mini-games and side bets for just this reason. Admittedly I've only watched people play, but there seems to be a whole lot more going on than simply pressing a single button over and over
If they were smart grown-ups they would be advertising the hell out of this: there's a lot more than $10 million to be made by allowing players to believe that a sufficiently smart "system" can beat the house. A really smart marketer would realize that a court case like this gets printed up in the newspapers and shared on websites (meta!) and might intentionally try to lose the case in a spectacular fashion.
This is the idea behind 100x or 1000x odds in craps. People either won't play that high, or the other -EV play decisions outweigh even massive true odds action
Yeah, 100x odds is a great marketing move but it isn't that helpful to the average gambler. A game of heads or tails with a fair coin would be the best EV bet in the casino, but it isn't that useful if I need to place a minimum $1000 bet per flip.
The modern American take on a corporation is the existent majority of successful corporations. That's certainly how casinos operate.
I'm not saying this is the kind of corporation I want--on the contrary, I despise that such organizations are allowed to exist.
But saying that corporations shouldn't act immorally when they can make more money by acting immorally is like saying termites shouldn't eat wood. It's the nature of corporations to seek profit at all cost and if you don't want that, you don't want a corporation, at least in the sense that corporations exist today.
That's not how the majority of corporations exist today, nor reflects how most people believe they should operate. It's the behavior of a small percentage of large corporations, largely supported by people like you throwing their hands up and going "well, that's just the way of it!"
Expecting corporations to behave ethically is no different than expecting people to behave ethically -- and we should do the same thing about both situations, establish rules and police them. It's nothing at all like termites and wood: it's a voluntary choice made by people, not a biological imperative from an unthinking creature.
It's the policing that has collapsed, because people like you have bought the propaganda that we should accept and normalize such behavior from corportations.
I think you're deeply misunderstanding my position.
I don't think we should accept and normalize this behavior from corporations, I think we should reject corporations as valid entities with a right to exist entirely.
Expecting corporations to behave ethically is not a reasonable expectation. Unlike individual humans, corporations only have incentives to make money.
I think policing is necessary, but it won't ever work as long as we treat corporations as capable of ethics. It should be assumed that corporations will do the wrong thing the instant it becomes profitable. Corporations should be considered guilty until proven innocent.
Im sorry, but your position just sounds like uninformed radicalism.
Most corporations manage to act ethically; corporations (big and small) have non-profit motives; and limited liability is pretty much required to have a functional economy.
Your arguments are largely about scale, locality, and control structure, and nothing about corporations per se.
> Im sorry, but your position just sounds like uninformed radicalism.
Don't be sorry for labeling my position, just don't do it. If you had a defensible position you could defend it without name calling.
> Most corporations manage to act ethically;
Inasmuch as it is profitable to do so, sure. It rarely remains profitable to do so, however.
Could you point out some examples of successful corporations acting ethically when it was not profitable to do so?
> corporations (big and small) have non-profit motives
Examples?
> and limited liability is pretty much required to have a functional economy.
Is it? Iceland put their bankers in jail and recovered more quickly from the subprime mortgage crisis than anyone. Limited liability allows economies to function for the rich, but that's a rather narrow view of functioning. The stock market is not the economy.
You cannot support policing and limited liability--limited liability means that policing has no teeth.
I labeled it as seeming such because I was hoping you'd elaborate, rather than baldly assert what are radical positions.
Before I answer your question, could you define what you mean by successful? I know that sounds facetious, but I mean it seriously -- most people mean, say, Walmart when I would consider a profitable local grocer to be successful, even without growth.
Examples of not-profit driven corporations would be any of the not-for-profit entities, for starters. Then you can get in to social purpose corps, c-corps where the shareholders focus on structural stability and long-term value preservation, etc. It seems that you're limiting your idea of corporations to being large, traded on Wall St corporations -- which I agree are problematic. Where I think we disagree is on the solution: I prefer smaller, localized corporations while you want to abolish them entirely (which I think inflicts a great deal of collateral damage, taking the idea to a net negative).
Limited-liability is purely the notion that assets not given to or gained from the corporation aren't subject to covering its debts just because you own part of the corporation. It has nothing to do with shielding executives from fraud or criminal prosecution, nor shielding the corporation's assets from unlimited liability.
The reasom we didn't put bankers in jail (like we should have) is that they didnt want to allege multi-thousand person conspiracies and RICO act the banks. That's because the political will isn't there, and not because the bankers were shielded from liability. I think we should use RICO against a lot of corporate malfeasance -- the law is literally designed to go after the leaders of large criminal organizations and seize related assets.
I disagree, very sharply, that the notion of limited liability means policing has no teeth. We're merely too light in seizing corporate assets in repinse to damages (eg, fines are too small) and we're too reluctant to prosecute crimes from business executives. But neither of these has to do with limited liability.
I would also point out that in my experience, limited liability helps a TON of small businesses, who would shut down if the owner's entire assets were required to be at risk because of employees. Myself included: I wouldn't run a consultancy (of myself and one friend) if giving "bad" advice (in the determination of a questionably informed and often emotionally swayed jury) meant my entire life could be taken away. It's not worth the risk to specialize and trade services under that framework -- the risk from courtroom whims is too high. (I do support public directories of bonded professions, however. That gives the client a good idea of how much risk they should take on because of your decisions. The problem is this presents barriers to entry.)
Or is your position that I should only be allowed to offer my services under the aegis of a large firm which would prevent personal liability to me as an employee? That seems far worse and more classist than the present system, which offers the immunity to anyone with $200/year.
The laws exist to remove legal culpability. It's not throwing our hands up, it's recognizing the source of the problem.
Until we fix the laws, the entire point of a corporation is to diffuse legal responsibility.
Yes, it needs to change, but it can't change from the ignorant position that we're fixing leaks and will eventually have a waterproof system. It's intentionally setup to be this way and nothing short of an entire overhauling will fix it.
The profit-driven focus hinges on one interpretation of a court case, and nothing at all to do with liability shielding from corporate status.
Similarly, the punishments doled out aren't constrained by matter of law from being effective, but rather, by the dynamic of the system and the willingness of the public to accept it from judges and prosecutors.
My point was that you've been propagandized to believe that the law permits the current system, when really the present system is likely illegal already and instead results from the lack of political will to replace corrupt government officials who enable poor corporate behavior.
The system would be much better if we actually enforced it... Which you guys refuse to demand from officials, because you've bought in to the notion that what they're doing is legal.
> The system would be much better if we actually enforced it.
Right. But ...
> Which you guys refuse to demand from officials, because you've bought in to the notion that what they're doing is legal.
No. Many of us demand that but nobody listens because they know they don't have to.
Realize that making the laws unenforceable is the intent. This is what I mean by patching vs replacing. Let's say we managed to get a few hundred bankers arrested for 2008. Then what? They change the rules slightly and next time we don't.
Instead we need to repeal all limited liability for any group. That way in the future it's not us vs them, it's us vs us, which is winnable.
And I agree that's it's already illegal. But it's constitutionally illegal, we don't grant government the right to create a privileged class and yet it did. And if our ancestors were dumb enough to sign off on this, we don't have to be.
We, the people, don't have to be bound to the muck that is our common law. The government is ours to charter as we wish and if huge swaths of it aren't working they can be thrown out wholesale. If we get bogged down in trying to navigate our(!) ruleset we've already lost the game.
Limited liability for corporations isn't unconstitutional.
However, Im very interested to hear how you propose to make an economy work without limited liability.
I dont think you have anything like a plan for that, and have confused the behavior of a few large corportations with corporatioms in general, while simultaneously missing the actual social structures causing the problems you list and the benefits of corporations.
> However, Im very interested to hear how you propose to make an economy work without limited liability.
Fwiw, I'd be interested to hear how you think the current system could work if we didn't come along and bail the economy out every few years by backing these bad business debts with public money.
> corporations in general
The sole defining characteristic of a corporation is limited liability. Everything else a corporation is, is inherent it being a group of people.
Further, all benefits we enacted corporate law to provide are now handled much more directly by bankruptcy statutes and welfare. You don't have to risk everything to engage in a business anymore.
> simultaneously missing the actual social structures causing the problems you list and the benefits of corporations.
So many benefits you couldn't list them all in the space provided? You favor a system where I pay for the crimes your business commits so the burden of proof is yours.
Gambling has always been a tax for the mathematically illiterate. Casino gambling has always been a scam and this proves it--whenever someone too clever comes along, they run right to the muscle to get their money back.
"Tax for the mathematically illiterate" is an mean thing that smug people say to pat themselves on the back and feel smarter than the "peons." It's like saying "people who go to concerts are too stupid to figure out how to buy a CD."
Even if you 100% know the odds are nowhere near your favor its possible to get pleasure from the act of putting down a bet, even if you lose. It can be a form of entertainment.
I, personally, don't get this pleasure but I can understand other people like different things than me.
Whether or not it should be legal, its additive potential is too much of a burden on society, or is ethical is a different question entirely.
The actual quote from the judgment is "allowing a player to unilaterally adjust the odds of a casino game in his favor – to any degree - would violate the essential purpose of legalized gambling." - which presumably refers to N.J.S.A 5:12-1(4) [1], which says that legalized gambling is a "tool of urban redevelopment" to "facilitate the redevelopment of existing blighted areas and the refurbishing and expansion of existing hotel, convention, tourist, and entertainment facilities." - In other words, "legalized gambling is supposed to bring money in, not let it out."
No better way to foster urban redevelopment than move money out of the public's pocket and into corporate coffers by exploiting inherent human weakness. I would laugh if this wasn't so sad.
Everything I've ever read says that the gambling revenue in just about every city that tries casino revitalization is more or less offset by the local small businesses the casino squeezes out. And at this point so many places are getting casinos you aren't going to get a lot of tourism.
I suspect that if you ask most punters if the house has an edge they would say yes, but if you ask them the purpose of them being there, it's because they want a chance to win big, not because they want to give the casino money.
So, sure, everyone knows the house has an edge, but saying that the purpose of legalized gambling is to enrich the casino is a very different claim.
It can't be controversial for anyone who is even barely informed. I mean, how do they afford to build the fancy casinos, pay the employees, etc.? There's no way it's a loss leader for the hotels or restaurants.
The purpose of every business is to make money. That doesn't mean that I am prohibited from making deals with them where they lose money. They have to look out for their own interests; they don't get to roll back deals when they accidentally make a disadvantageous deal.
Obviously everybody knows that the house as an edge. The question here is if that is fundamental or an implementation detail, ie can the casino give up its edge in certain situations and still be considered legalized gambling.
Casinos certainly do give up their edge in certain cases: apparently they'll mix in slot machines that have positive EV in some cases, which can give them an advertising advantage (and the additional players looking for these machines will presumably play enough on other machines while looking that the casino comes out on top overall).
No, casino's don't have an edge on blackjack, not when the player is able to count cards.
Also slot machines can be profitable under certain conditions: when they have a jackpot which has gone up above a certain limit.
Both these games are exploited by some professional gamblers.
Casinos have an edge on blackjack. It's not a symmetrical game. They choose to not use the edge to its fullest extent sometimes, up to a point where it can be locally profitable to play if you count cards. That doesn't change the fact that they can at any given time choose to shuffle the deck after each hand, which will return the edge.
If we're being technical, shuffling actually lowers the house edge a bit if you are not counting cards, but completely restores the edge if you are trying to count cards. This happens because for each hand of blackjack it is more likely that the last card played is a high card (you are more likely to draw again on a low card), so the remaining deck is slightly lower on high cards on average if you don't shuffle compared to shuffle, and high cards are good for the player, so not shuffling is better against non-counters, but a lot worse against counters.
They most definitely have an edge on slot machines. The fact that there are at times local maxima that favours the gambler doesn't impact the overall edge. This is the same as lotteries with a carry-over jackpot etc. The jackpot is paid for by other gamblers who played against really bad edges, not the casino.
correct, and why should that surprise anyone? from the state's perspective legalized gambling is a tourist attraction, entertainment service, and tax revenue source. if the house _doesn't_ [statistically] always win the system is malfunctioning.
"One of these days in your travels, a guy is going to show you a brand-new deck of cards on which the seal is not yet broken. Then this guy is going to offer to bet you that he can make the jack of spades jump out of this brand-new deck of cards and squirt cider in your ear. But, son, do not accept this bet, because as sure as you stand there, you're going to wind up with an ear full of cider."
It also reminded me of Don Johnson, who saw casinos desperate for high rollers and set up a few conditions on a private Blackjack game that actually shifted the odds ever so slightly. Won $15 Million from Atlantic City's desperation or stupidity, then got to keep the money.[0]
If Ivey had chosen a game with just a little skill, he might have been able to cool the mark with some cover story about a new statistical technique and get away with it.
You should only keep track of the baccarat winnings/losses. If he won $9.6M in baccarat and lost $500k in craps, they should still ask for $9.6M, not $9.1M.
That said, they agreed to the rules, they should eat the loss anyway. The government has no role in protecting businesses from their own stupidity.
The argument (which I don't agree with, but which has some merit) is that he and his accomplice used knowledge available only to them which constituted a fraud against the casino.
The reason I don't agree with it is that the fact that the cards were printed in a manner which made it possible to do this does not mean they defrauded the casino, it means the casino shouldn't have agreed to use those cards because their security folks should have known about this issue.
No, the arguments is not that is it fraud, that's addressed in the article, "Ivey did not commit fraud, Judge Noel Hillman for the U.S. District of New Jersey wrote in an opinion on Monday." The argument is it the game wasn't legal under New Jersey law as one party knowingly used marked cards. The judge believes that the fact that they didn't mark the cards themselves isn't important.
Casinos where the rules ensure you loose even when you devise a method of skill and intellect to win, you still loose. Isn't that the very definition of a rigged game?
The judge had a very odd interpretation of the contract and "maneuvered", it appears one sided to me.
"
“By using cards they caused to be maneuvered in order to identify their value only to them,” the judge wrote, “Ivey and Sun adjusted the odds of Baccarat in their favor. This is in complete contravention of the fundamental purpose of legalized gambling as set forth by [New Jersey’s Casino Control Commission.] Ivey and Sun’s violation . . . constitutes a breach of their mutual obligation with Borgata to play by the rules” of the state’s law.
"
That interpretation is equivalent to saying you can't do anything that improves the odds in your favor in any game. By this judge's reckoning, you have to just be a robot that sits passively and accepts all the hand exactly as dealt and not use any strategy to play the game to your advantage. That's fundamentally un-American if you ask me.
> By this judge's reckoning, you have to just be a robot that sits passively and accepts all the hand exactly as dealt and not use any strategy to play the game to your advantage.
That's basically gambling. Which is exactly what the game they were playing was supposed to be. Pure chance. In fact gambling can be distilled down to that. Passively accepting your hand in the game and hoping for the best. That doesn't sound very appealing, but throw in human nature and biases and you get something quite addictive out of what is essentially a lopsided passive engagement.
> By this judge's reckoning, you have to just be a robot that sits passively and accepts all the hand exactly as dealt and not use any strategy to play the game to your advantage.
That's baccarat -- the only interactivity is adjusting your bet.
This is a classic magic trick as old as this hills isn't it? You sort a deck of cards so that the backs are all oriented one way (the pattern on the back is usually not exactly in the centre), and then you rotate the chosen card 180 degrees so you can relocate it even after shuffling.
I don't know the name of the trick but I learnt it as a child.
So essentially one of them cracked and admitted it? Or they bragged to someone? I can't understand how they would have otherwise found out about the scheme. It seems as if they just kept tight lipped about it, stuck to their requests being a superstition, they would be fine.
The most likely scenario is that at the second casino one of the managers saw the strange winnings, rewound the tapes, and deduced what they were doing with the rotations.
Once that's done, Ms. Sun's criminal record would be easy to track down. Inquiry to figure out what she had in her cell with her.
Then it's a matter of asking them, under oath, to confirm these conclusions. They either have to plead the 5th (which I don't think one can in England) or acknowledge what they did.
A good casino lawyer and investigator could get 90% of this.
It's beyond belief that people spend money to gamble at casinos. It's one thing to know with 100% certainty that the house has the odds in their favor. But an entirely different beast to know that AND know that if you do find ways to win the casinos will still do everything in their power to prevent you from taking home the winnings.
> It's beyond belief that people spend money to gamble at casinos.
You're looking at it wrong then.
1) Going to the casino isn't looked at as a profitable job, it's entertainment. You can pay to see a concert, go to a bar, or in this case (maybe) pay to have some excitement
2) Free rooms are very common
3) Free drinks are standard
Instead of going to a bar and paying $8/drink, the drinks are free while you are gambling. That alone makes it "beyond belief" that anyone would go to a bar no?
I'll occasionally go to the casino with my wife, and put aside a couple hundred dollars for the night. I play at the low end blackjack tables and she generally enjoys slots. For a couple hundred dollars, we both get an entire night's worth of entertainment (we both enjoy the playing, we don't expect to win). Sometimes, we even win some (little) money, which adds to the fun.
At the end of the day, it works out to spending money for entertainment, the same as any other night out.
I play roulette as an adventure randomizer, and pay the casino a tiny sliver of the amount for making that more exciting than rolling dice in my hotel room.
Roulette is fantastic for answering questions like "Do I have a $50 meal or a $200 meal?" Simple: just place $50 on a column or dozen. Bam! Your cashflow is more or less randomly distributed instead of at a flat rate, for a 5% loss. Ignoring the casino's slight edge, you can see it's shifting money -- each of 3 days, you have $100, totalling $300; on a large number of games, you'll win 1 for every 2 you lose, so you'll have 2 days where you lose $50 and 1 day where you win $100. With the casino's edge factored in, you turn a consistent $300 in to a bursty $292.
Works for basically any time you're wanting to turn a flat, planned cashflow into a dramatic bursty cashflow.
Ed: maths is hard; fixed expected value. Accidentally applied casino's edge to total cash instead of just portion gambled.
While I initially thought that he and Sun should be able to keep their money (I assume she was paid handsomely for this?), after thinking about it more, I realize how livid I would be to find out that the casino had done this to better their own odds.
I think that the situation is maybe slightly more complicated than it seems at first glance.
To those who didn't read the article: the backs of the cards were not perfectly symmetrical, so by asking the dealer to rotate the cards so that some were oriented one way, and some were oriented the other, eventually they were able to get themselves an advantage by knowing some data about the value of those cards before they were flipped.
Although I guess if everyone knew about this asymmetry (both casino and player), then perhaps observing it would just become a part of the skill aspect of the game?
There are no decisions the casino makes in the game of baccarat where they could gain an advantage by knowing what the face down cards are. So there is no situation in which you could be "livid" as you describe.
I'm not 100% sure, but I'm fairly certain that this is true for every casino card game. As the casino is handling the cards the games are designed such that the card handlers can gain no edge by surreptitious looking at the value of face down cards.
>I realize how livid I would be to find out that the casino had done this to better their own odds.
That's because the casino is supposed to tell you what they're doing. A casino making decisions based on secret criteria is very abnormal. But the player almost always does so.
The tone of most of the comments is very surprising to me. Many seem to argue that the ruling is wrong or too harsh, which I don't really see the basis of. I personally think that unskilled gambling should not be a thing, but in the current state of things I don't see how Ivey and his friend aren't committing a blatant fraud.
A lot of people seem angry that the odds are always in favor of the casino, and comment in a way that implies that if you gamble with odds against you, you are definitely going to lose money. This is not the case at all, and typical casino odds mean that in a single event, your chance of a net win is close to your chance of a loss.
I keep reading here that there is no shame in business making money, so how else would that work for the gambling industry?
As for their card trick, they both knew very well what they were doing, that is was at best immoral if not illegal. What if it had been a scheme to defraud a tech company? Using a weakness in the system to extract millions? Would we read "too bad, they should eat that loss and take it as an opportunity to improve their process"?
> I keep reading here that there is no shame in business making money, so how else would that work for the gambling industry?
> As for their card trick, they both knew very well what they were doing, that is was at best immoral if not illegal.
There is no shame in doing anything within your abilities and the law to take money away from a business either.
As for their card trick, the casino agreed to all their demands and took the risk that something was going on they did not understand, with the expectation to take money from individuals in a way (gambling) that is at best immoral.
You may see what I did there.
For me it works both ways. Neither side can claim the moral high ground in this game they both agreed to enter - the only thing that stands out to me is that the side that isn't used to losing, lost.
> so how else would that work for the gambling industry?
It would work by denying Ivey his requests and policing your games properly, as many casinos did do. Ivey isn't exactly an unknown in gambling circles - the Bogota went in eyes open, accepted the conditions and lost.
>I don't see how Ivey and his friend aren't committing a blatant fraud.
So that means you disagree with the judge?
>I keep reading here that there is no shame in business making money, so how else would that work for the gambling industry?
If we ignore addiction, there's no shame in running a casino. But if you play with fire and 100% agree to something with full competency, don't complain when you get burned.
>What if it had been a scheme to defraud a tech company?
Then that would be fraud. This isn't.
>Using a weakness in the system to extract millions?
When the weakness is condoned by someone that should know better, and they agree to it over and over again, and the terms of the agreement are honestly being followed, then yes they should suck it up and fix their process for the future.
The difference between their trick and the superstition seems to be only in success rate, to me.
If the casino allows the players to perform arbitrary actions within the limits of the rules in order to try and improve their luck I fail to see how Ivey and Sun can be considered to have defrauded the casino by performing their selected and previously agreed actions.
> What if it had been a scheme to defraud a tech company? Using a weakness in the system to extract millions? Would we read "too bad, they should eat that loss and take it as an opportunity to improve their process"?
Remember when the Ethereum DAO got hacked? I seem to recall a lot of people making that exact argument.
Having seen a number of cases like this in Vegas growing up I doubt the judge will be overturned on appeal. Just like they would fine the casino if the casino noticed the player tended to lose more given some situation and the casino created a circumstance for that situation to occur more often. Changing the odds on either side of the equation is frowned upon by the judiciary.
>if the casino noticed the player tended to lose more given some situation and the casino created a circumstance for that situation to occur more often //
I wish I could write this in a more pithy way, but I feel like it's one of those jokes I have to explain, mostly for my own benefit, and thereby ruin it, but get a jolly good laugh out of it in the process.
So anyway, here it is:
If the casino noticed the player tended to lose more given some situation and the casino created a circumstance for that situation to occur more often.
And that's the punchline. Right? It's like some kind of self-referential / tautological definition of a casino.
To belabour the point: We noticed people tend to lose more money if we build casinos.
"SEPT. 10, 12:30 P.M., CASINO DE MONTREAL "Hi, this is Phil Ivey," he says into his phone, from the back of a limo sent by Casino de Montreal. "I need you to transfer $1 million from my account, please."
There is no self-consciousness, no hint of understanding that the rest of the world doesn't make requests like this. "I know it's a lot of money, but I like to gamble," Ivey says. "It's just in me. I try to manage what I do playing craps or blackjack. At the end of the year, I don't want the amount I gamble there to be bigger than what I win playing poker.""
One - Ivy got greedy. Had it make it appear as though he was losing some of the games, he probably would've gotten away with it. If you lose, then win, then lose and are up at the end of the night, it's more plausible you weren't cheating. The way all of the articles I've read about it, he basically ran the table for several hours and then left.
Two - you go into any casino and use card counting techniques (like the ones the MIT team used) and within ten minutes, the pit boss will cut you off because its obvious what you're doing. This is the very same technique Ivy was using. Lowering his bets when the cards were low, then increasing his bets when the cards were favorable. I'm actually pretty shocked the casino let him play for so long when it was so obvious what was happening.
> Two - you go into any casino and use card counting techniques (like the ones the MIT team used) and within ten minutes, the pit boss will cut you off because its obvious what you're doing.
When I was a blackjack dealer we had people counting cards all the time. Most were very easy to spot and were touristing. They never got harassed, but when you got one you would usually chase him away because for some reason they were really bad tippers. (chase them away by making them uncomfortable, not by asking them to leave)
Occasionally you'd get a grinder - guys that do it for a living and rotate between casinos before they wear out their welcome. They were fine too in small doses. The ones I recognized were sociable and had a system for tipping just like they had for everything else.
Guys like Ivy/Johnson... never ran into one. If this had happened in my day, a trip to the desert would have been an option.
It really depends on the situation and the person. You could call them out on what they are doing. Burn extra cards or change up your shuffle. Slow down or speed up the game. Have a quiet conversation with the pit boss. Ask for new cards. Steer conversation in a particular direction. Flirt. Make mistakes. The list goes on.
When you play cards 5 hours a day with 2 1/2 hours of breaks there is a lot of opportunity to think about how to maximize your tips.
> I'm actually pretty shocked the casino let him play for so long when it was so obvious what was happening.
This is what surprised me as well. I can understand them accepting he's doing something and trying to figure out what it is, but to let him go for that long? Perhaps it had something to do with the private room, etc?
Actually, it sounds like he got greedy when he later tried it at a London casino after; they found out, and kicked him out and sued him - and won: That tipped off the Borgata casino. Had he not done that (ie - went to London to pull off the same), the Borgata would likely would never have known.
It's a very interesting game. I read once in "How I lost a million dollars", but never checked for myself, that publicly traded casinos list Baccarat on their SEC fillings as a possible way their earnings can be affected (both positively and negatively). In the book the author was with a wealthy client who gave him and his friend $10k to play with. They each won something like $8k each and proceeded to enjoy Las Vegas with it. (Numbers are fuzzy. Corrections are welcome.)
He lost the meta-bet, which was that he could win big and win in court. Unless he was just doing it for publicity, he could have used his scheme to take small winnings for years.
Hopefully he has his assets protected and can file for bankruptcy. Worse than having to pay back his winning, which he probably has paid some taxes on and spent some. He's probably ruined and most places will not allow him to play at their tables. How he is ever going to make back the money to play?
Taxes are irrelevant, You file a form 1040X to adjust your taxable income and get that money back from the IRS. He probably never even saw that money anyways because likely the casino withheld taxes (I assume that's what they do, I don't gamble) As far as spending, I thought the same thing until I read the article, he's already a multimillionaire, "A gambler by profession, Ivey billed himself as the “Tiger Woods” of poker; he had won more than $6 million from several tours on the World Series of Poker and another $19 million through years of online poker."
They're supposed to be symmetrical, but I guess some part of the printing process/card design/some odd combination of the two made them almost imperceptibly asymmetric.
It was just a manufacturing defect that the house didn't know about. Of course its unusual, and the defects were only 1/32 of an inch so its amazing a human can spot that.
As The Washington Post reported in 2014, Ivey and Sun relied on the same method in a London casino. The casino refused to pay the pair, and a British judge declared that edge-sorting was cheating. (It was the London casino’s decision to withhold Ivey’s winnings that tipped off Borgata in October 2o12.)
If you are going to not cheat like those guys - quit while you are ahead.
This strategy plays constant small wins against the occasional big loss. If you start your runs with one dollar, you can only win one dollar in any given run, but you can lose your entire budget on any run.
As others have mentioned this is indeed not true and is referred to as the Martingale betting system [0]. In the case of casino games Martingale still has negative EV. Your EV for any round n is (1-q^n)B-q^n(B^n-1) (chance of winning within n rounds times amount won minus chance of losing n rounds times amount lost) [1] which is B(1-(2q)^n) with B the initial betting amount and q the chance of losing. Since in any round your chance of losing is always slightly greater than 1/2, you will have a negative EV in any round you play, there is no number of rounds for which the EV becomes positive.
The standard deviation of this is fairly large though so that the chance of this happening is very small but nevertheless it isn't zero and what you lose is more than you can expect to win. As sleepychu mentioned, the amount you bet goes up exponentially ($1M after 20 rounds).
Aside: It is sometimes said that in order to do this "double when you lose" strategy, you need to e.g. "stick to red for the entire run". This is false. If I bet red-red-red-...-red-red I am just as likely to win/lose as when I bet red-black-odd-odd-even-...-red
This works but you don't need to lose all that many hands in a row before your stake is huge compared to what you stand to recover. By the 20th hand you're over $1M for the single bet and you've invested ~$500K to get this far, all to eventually win $1 per hand if you have the bank to cover it.
Were these cards used to run other games in the casino? Is the casino now going to take steps to refund all the players that partook in games with these marked cards?
The casino operators need to think about the law of large numbers.
If you have an edge, what you want is for a bunch of little guys to bet against you. Your certainty of winning against a million little bets is enormous, if you have an edge. And you do, because those games are made that way.
What you don't want to do is bet a few big bets. You might be smarter than me at guessing the outcome of an election, or a coin toss, or any other event, but if there's only one, you may very well still lose.
If you have a few huge fish, there's almost no point in having the little ones. Your outcome depends on the huge bets.
It's not just casinos who don't know this. I had a friend at a hedge fund complaining to me that he was allowed to risk ~1MM USD/bp on interest rates, but he sat next to a guy who was allowed ~50MM USD/bp. So everyone's bonus depended on the big guy, and everyone else might as well just not be there.
It's possible the casino simply considers the gambler's risk-of-ruin stop to be sufficiently close that they'll mostly hit that stop.
You significantly underestimate the sophistication of the casino operators. Those few huge fish aren't each making a single bet. They're making many many bets. Enough that the house edge is extremely likely to manifest itself except in cases like this one where the house edge had been manipulated.
The casinos more than understand this. They can tell you the break down between whales and average gamblers.
The problem is there's a really uneven distribution. They probably get 50% of the wagers from 1% of the gamblers. But they still have enough whales that they rarely have a losing day.
If indeed a whale was betting 100 million on black or red at roulette, and the total bankroll of the casino was 500 million.. it would be very easy for the casino to go under.
But if the max bet on a spin of roulette is 1 million dollars, and the casino has 1 billion dollar bankroll.. you can do the math of the odds of a whale busting the casino. Hint: It does not look good
But if you have the probability/gambling side down, your problem isn't that.
Your issue is how to spend less on marketing and entertainment than what you get from winnings, because there's competing casinos as well.
I suspect what's happened is there's some guy in the casino who actually does know how the numbers work, they just get overruled by an eager manager who is optimizing a different schedule.
I also think it should have been fairly obvious to the casino employees that some kind of advantage play was happening. Ivey is very well known as a poker player, and while he also is known as a gambler, arbitrary superstitions are outside of his character. The specificity of the conditions he asked for should have tipped his hand earlier than they did, but the casinos probably treated him like any other baccarat whale.
Hopefully this decision is reversed. I don't know what part of the law it supposedly broke, but it seems like the judge believes that the player in the casino has a legal obligation to be a sucker.