Phil Ivey is one of the most influential poker players in modern history, but the actions of the 10-time WSOP bracelet winner are now also setting precedent far away from the poker tables. Ivey’s name is now being cited regularly in the law courts of the United Kingdom, where the fallout from his battle with the London casino Crockfords continues to be felt.
The most recent edition of the BBC Radio 4 programme Law In Action focused on how Ivey’s infamous case — officially “Ivey v Genting Casinos” — ended up changing the UK legal test of dishonesty, with ramifications for myriad other trials. How that came to be true is fairly long-winded, but stick with it because it makes sense in the end.
Listen to the show — segment starts at 16’45”.
A brilliant winning streak
As has been well documented, Ivey lost a 2017 court battle with Genting, the owner of Crockfords, over £7.7 million of unpaid “winnings” he accrued at the baccarat tables over two nights in 2012. Ivey and an associate named Cheung Yin “Kelly” Sun tilted the odds at the punto banco tables in their favour by employing a technique known as “edge-sorting” — a strategy that depends on noticing small irregularities in the patterns on the back of playing cards.
Ivey and Sun honed the technique to perfection, and also managed to persuade unwitting croupiers to manipulate the decks on their behalf, so that they were able to predict more accurately than usual whether a high value card was going to be dealt next. Ivey was able to change his betting pattern to make the most of this additional information and to win at a rate far higher than usual at what is essentially a break-even game. (The odds in punto banco usually favour the house by around 1 percent.) He turned a £1 million investment into nearly eight times as much.
(The Washington Post did a very good job of explaining edge-sorting and its relevance to Ivey’s case.)
Not so lucky after all
After an internal investigation into Ivey and Sun’s remarkable win, Crockfords detected the edge-sorting and decided the technique was cheating. The casino refused to wire the £7.7 million (more than $11 million at the time) to Ivey.
Ivey, who disagreed with the assessment, went through two court trials in the UK’s civil courts in a bid to recover his winnings, but lost them both. The judge laid out the terms of the case in the first trial, stating that “If Mr Ivey cheated, he is not entitled to recover his winnings. If he did not, he is.” But the same judge eventually decided that in his view Ivey’s actions represented “cheating for the purpose of civil law” and ruled against the poker pro.
Ivey did not deny that he and Sun had been edge-sorting and issued a statement at the time that read: “It is not my nature to cheat and I would never do anything to risk my reputation…I believe that what we did was a legitimate strategy and we did nothing more than exploit Crockfords’ failures to take proper steps to protect themselves against a player of my ability.”
This claim formed a central part of his subsequent appeal, heard at the Supreme Court in London, which led to a discussion of the legal definition of dishonesty. It’s also why Ivey’s name is now being repeated in other trials, because the judge in this latter case, Lord Hughes, set a new precedent when he too ruled against the poker player.
According to Joshua Rozenberg, who hosts the Law in Action programme, at the time of Ivey’s appeal, the the UK had a fairly subjective definition of dishonesty. “Jury members used to be asked whether a defendant must have realised that ordinary, decent people would have regarded his or her behaviour as dishonest,” Rozenberg explains. “It depended on what defendants thought. So the more warped their standards of honesty were, the less likely they were to be convicted.”
In other words, if Ivey genuinely thought that his actions were not dishonest — and, further, if he genuinely thought that ordinary people would agree — then he had a decent defence against the allegations of cheating.
“The courts have struggled over the last 50 years or so to agree on a firm definition [of dishonesty],” David Ormerod QC told Law In Action. “There has been the possibility for a defendant to say, ‘I didn’t realise that ordinary, decent people would see this as dishonest.’ It was not about [a defendant]’s personal perception of dishonesty alone, but rather his perception of what ordinary people see as dishonest.”
(There’s a much fuller examination of this, with respect to the Ivey case, on the “Keep Calm and Talk Law” blog.)
Ivey, of course, did not think he was being dishonest. He said he was using a legitimate strategy, and many gamblers will agree with him. By way of example, Law In Action quoted Richard Munchkin, host of the Gambling With An Edge podcast, who said of the ruling: “I think it’s a travesty, it’s an absolutely travesty of justice.”
But when Lord Hughes rejected Ivey’s defence he essentially said that it did not matter anymore what a defendant thought was dishonest. He shifted the ultimate decision on what constitutes dishonesty to a jury (or a tribunal or judge), and made it a more objective test.
Ivey returns to court – in name at least
As some commentators realised at the time, other trials would now be impacted by this subtle shift in the legal definition of dishonesty — many of them on even more serious subjects. The Law In Action programme reported on a recent case in a UK criminal court (separate from a civil court) in which Ivey’s name came up.
In this case, a former owner of a care home in north west England was convicted of conning elderly residents out of more than £4 million. He was ruled dishonest, convicted of fraud and described by the judge as “morally bankrupt and a despicably greedy man”.
When the care home owner’s lawyers appealed his conviction this year, they claimed that the trial judge had incorrectly applied Lord Hughes’s test for dishonesty — the one established in the Ivey judgment. They said a civil ruling didn’t apply in a criminal case. This appeal was also unsuccessful, however, and another senior judge said that the Ivey ruling had been correctly applied.
It gave the green light for “Ivey v Genting Casinos” to be used from now on as an official test of dishonesty — and while Ivey himself won’t be stepping back into the courtroom, his name will be read out time and again.
It’s just one more way in which this brilliant poker player will be remembered forever as a game changer.