Borgata Files Cross-Appeal in Phil Ivey Edge Sorting Case

Poker cards falling

New Jersey’s Borgata casino has filed a cross-appeal against world-famous pro gambler Phil Ivey in their high-profile “edge sorting” legal battle, with an additional $5.65m (£4.36m) or more at stake.

The parent company of Atlantic City’s Borgata Hotel Casino & Spa, Marina District Development Corp., has filed a cross-appeal in its ongoing legal war against professional poker player and high-stakes gambler Phil Ivey. The battle is over the now-infamous “edge sorting” scheme that Ivey and a partner used to win roughly $10m (£7.7m) at the casino’s mini-baccarat tables.

The brief filing by counsel for the prominent East Coast casino immediately follows the filing of the appeal by Ivey and his partner/co-defendant, Cheung Yin “Kelly” Sun. Ivey and Sun appealed a finalized lower-court ruling in which $10.13 m (£7.81m) was awarded to the Borgata, which represented the $9.6m (£7.41m) won by the pair over the course of four multi-day mini-baccarat sessions from 2010 to 2012, plus over half a million dollars in additional damages.

The Borgata’s cross-appeal was filed on September 27, 2018, just weeks after Ivey and Sun formally filed their appeal, which had been promised soon after the split-decision ruling, largely in Borgata’s favor, was handed down in late 2016. Nearly two years elapsed before the initial ruling could be declared final, due to other complications in the case.

Borgata appeals “adverse” rulings

The initial ruling handed down by US District Judge Noel L. Hillman in 2016 basically returned the two sides to the financial state that existed before Ivey and Sun began their sophisticated edge-sorting scheme. The only difference between the nearly $9.6 million “won” by Ivey and the $10.13 million later awarded to the Borgata was $504,000 (£389,000) that Ivey won in high-stakes craps at the casino. That sum was deemed “fruit of the poisoned tree” (generated from Ivey’s mini-baccarat winnings) and ordered returned as well.

However, the Borgata believes it’s entitled to much more. As part of its initial lawsuit, the casino and its counsel submitted a mathematical theory suggesting that if all of the roughly 1,800 hands played by Ivey during the four sessions had been played with the normal house edge intact, the Borgata would have been expected to profit by about $5.4m (£4.17m). Instead, Ivey “won” $9.626m (£7.43m) by slowly shifting the odds his way.

That $5.4 million the Borgata sought would have been expected to compensate for operating expenses incurred in providing the high-stakes game for Ivey. The Borgata also sought and was denied compensation for another $250,000 (£193,000) in lavish casino perks extended to Ivey and Sun over the course of the pair’s four visits to the Atlantic City property.

The cross-appeal was filed in Hillman’s court as an adjunct to the initial ruling, just as the initial appeal was filed a month ago. Several such matters have been addressed in recent weeks, including the formal dropping of claims against cardmaker Gemaco, Inc. and a “Jane Doe” Gemaco employee also named in the Borgata’s original complaint.

Appellate case gathers steam

The entire matter is now in a 14-day period during which initial statements, summaries, and requests for documents must be filed. The cross-appeal made by the Borgata may alter or extend those deadlines, and a three-judge panel will hear the whole matter at a later date.

Though dropped as a co-defendant, Gemaco may still be required to submit documentation relevant to the appeal. The New Jersey State Police have also been notified about possible involvement. The lower-court ruling gave leave to those police to submit a filing to the case. However, as the appellate docket notes, it’s unclear on whose behalf that enforcement agency would appear. The agency investigated the matter at the Borgata’s request soon after Ivey’s and Sun’s scheme was exposed but declined to file charges against the pair. The police agency would have had to file a brief by September 18, and so far, no record of such a filing exists.

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