Written by John Fremer, President, Caveon Consulting Services
May 2, 2014
I was intrigued by a headline in my local newspaper:
Borgata: Poker Star Phil Ivey Cheated Us Out of $ 10 Million Using Edge Sorting
I have followed Phil Ivey a bit on TV poker shows and he is one of the best poker players in the world. His skill has been demonstrated conclusively and publicly over many years in all manner of settings. The Borgata is the most financially successful casino in Atlantic City and is the closest one to my home at the New Jersey Shore. What was going on?
The press report, which is what I am going by as I have no “insider information,” says the following:
- Phil Ivey is accused of “cheating” not at Poker in a competition with other players, but at Baccarat playing against the house. (Baccarat is the game you see in some James Bond movies.)
- The advantage that Ivey gained over the house stemmed from his awareness of a flaw in the playing cards used by the house.
- There is no accusation that Ivey marked the cards, colluded with a dealer, or used any special device to determine anything about the dealer’s cards.
- Ivey used the fact that the particular brand and one color variety of cards being used was defective in that the “edge” of the cards revealed to the skilled and very careful eye information about what the dealer held. He insisted on using cards of a particular color and the casino obliged.
- The Borgata casino lost quite a bit of money to Ivey, $ 10 million according to the suit and they call his behavior cheating.
Assuming that the facts in this story are correct; does Ivey’s behavior constitute cheating? I posed this question to colleagues of mine and got a variety of responses. Some said “Of course it was cheating, he gained an unfair advantage.” Others said “No cheating, Ivey did not break any rules.” I don’t feel that my view trumps (forgive the word, please) the views of my colleagues, but I am going to give my perspective.
I don’t view Ivey’s behavior as cheating in that near as I can tell he followed all the rules of the game. There was an “unfair” outcome in terms of how the game is supposed to work, but that was the fault of the card manufacturer and the Borgata casino. I don’t see Ivey or any other casino gambler as having the responsibility of making sure that the casino enjoys the full advantage that is built into every casino game where you play against the house. It is also true, though, that if we were judging Ivey’s skill at Baccarat or if he were playing against other gamblers who did not have the same information as Ivey did, it would be cheating. So under such circumstances the Baccarat “exam” would not be a valid measure of Ivey’s skills on either an absolute or relative basis.