Borgata Fires Back at Phil Ivey over Stay Motion in “Edge Sorting” Case

Borgata Hotel Casino Spa [Pic: PilotBob]

New Jersey’s prominent Borgata Hotel Casino & Spa and famed high-stakes gambler and professional poker player Phil Ivey continue a post-judgment battle in their high-profile “edge sorting” case. Counsel for the Borgata has filed a memorandum seeking a summary denial of an Ivey motion to stay the required deposit of the $10.13 million judgment before the case proceeds to appeal.

New Jersey’s Borgata Hotel Casino & Spa continues its efforts to force prominent “edge sorting” gambler Phil Ivey and his co-defendant to post a $10.13m (£7.9m; €8.8m) appellate bond. A decision on the bond issue must be made by the presiding judge, Noel L. Hillman, before the headline-making legal battle moves on to a formal appeal that’s been waiting to begin for more than a year and a half.

The latest filing by the Borgata’s counsel, Jeremy Klausner, accuses Ivey and his defense of attempting to re-argue elements of the case already decided in the Borgata’s favor in the original ruling, which was issued in December 2016. Among reasons for the long delay were parallel claims made by the Borgata against US cardmaker Gemaco; those claims were dropped earlier this year.

A motion made in late July by attorney Louis M. Barbone for Ivey and his partner in the edge-sorting scheme, Cheng Yin “Kelly” Sun, asserted that Ivey and Sun shouldn’t have to post the $10.13m as a bond before the appeal moves forward. According to Barbone, the bond should be stayed because of the “likelihood of success on appeal” and the “substantiality of loss” upon Ivey and Sun if they actually put up the bond, which represents roughly the amount of profit earned by the two through their scheme at the Borgata that has been judged illicit.

Borgata blasts stay motion’s rationale

Klausner’s legal memo on behalf of the Borgata’s parent company, Marina District Development Co. LLC, tears into the Ivey defense filing with some of the sharpest language seen in the case. On the claim that Ivey is “likely” to prevail on appeal, Klausner wrote: “Defendants’ entire argument that they are ‘likely’ to succeed on appeal is simply that this Court got it wrong and the Court of Appeals is likely to get it right. That is the appellant’s position in every appeal, and it takes much more than simply saying the District Court is wrong to demonstrate likelihood of success.”

Klausner similarly speared the “substantiality of loss” assertion as being a frivolous claim that runs afoul of appellate. “Although not fully articulated,” the memo says, “defendants’ argument appears to be that there is irreparable harm because of the amount of the judgment. That does not satisfy the well-settled understanding of what constitutes irreparable harm. It is universally understood, and defendants impliedly agree, that purely economic harm does not qualify as ‘irreparable.’ … This case is measured solely in monetary terms, and therefore there is no irreparable harm as a matter of law. For this reason alone, Defendants’ request for a stay pending appeal must be denied.”

Klausner revisited the point in summarizing the argument that the Ivey stay motion may violate established precedent: “Plaintiff would be remiss in not pointing out that if Defendants were granted a stay, a bond or other adequate security is required. While Defendants ask for a stay without bond or other security, that is directly contrary to the applicable case law.” Citing a US federal rule of civil procedure about the bond, technically called a supersedeas bond, he added, “The amount of the bond should normally be equal to the amount of the judgment against the appellant.”

Ivey’s big-money appearances belie paucity claims

The recent return of Ivey to the high-stakes poker tables and Ivey’s other prominent business ventures offered grist to the Borgata’s assertion that posting the bond shouldn’t impact Ivey’s financial well-being, given that the money was the Borgata’s in the first place and that being a professional gambler isn’t quite the same as other professions or businesses who might be impacted by the need to post an appellate bond.

Ivey has been participating in high-stakes cash games around the globe for the past several years, but recently returned to some prominent poker-tournament scenes, including this past summer’s World Series of Poker. The Borgata filing detailed some of Ivey’s recent tourney showings, all since May 2018: “He placed third in the Triton Series Short Deck Event in Montenegro, staking the $127,000 entry and taking home $2.2 million. In June 2018, Ivey claimed a late seat in the aptly named Super High Roller Bowl at the Aria Casino in Las Vegas. Although he did not place in the money, he had no problem coming up with the $300,000 entry. [Then] Ivey was back at the World Series of Poker in Las Vegas, the poker world’s most prestigious series of events. His first event was the $100,000 No-Limit Hold’em High Roller (Event #5), which carries an entry fee of $100,000. He also participated in the $50,000 Poker Players Championship (Event #33), posting the $50,000 buy-in and winning $111,447, as well as the Main Event, posting the $10,000 entry fee and taking home $23,940.34.

“[Ivey] is in the top 3 for poker winnings all time, and there is no suggestion that he cannot continue to be successful. Entrance fees for other poker tournaments are far less than $10,000 and one can play online poker with initial deposits of under $100. He is not in danger of being prevented from playing poker.”

Crockfords case element reemerges

The roughly parallel United Kingdom court case where Ivey unsuccessfully sued London’s Crockfords casino over roughly $12 (£9.36m) in mini-baccarat “winnings” also derived from Ivey and Sun’s edge-sorting scheme also reemerged here. As Klausner wrote: “As early as October 2012 (immediately after the fourth trip to Borgata), Ivey knew that his edge sorting scheme was unmasked, with Crockfords publicly withholding about $12 million in alleged winnings. There is no indication that Ivey did not prudently sock away Borgata’s $10 million, figuring that was the next shoe to drop.”

Unstated, but likely very much on the minds of Borgata’s execs and legal counsel, is that for Ivey’s Crockfords visits, and perhaps those at the Borgata as well, he bank-wired in his gambling bankroll from a Mexican account. Getting the $10.13 million in the Borgata ruling from Ivey and into the reach of the US court system is the primary motive over the Borgata’s strenuous battle against Ivey’s stay request.

Klausner wrote as much here: “This case is about money, nothing more and nothing less. Ivey already has Borgata’s $10 million, and he is clearly not in danger of going out of business. Defendants did not and cannot demonstrate irreparable harm as a matter of law. They are not entitled to a stay pending appeal.”

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