Phil Ivey

Borgata Responds to Phil Ivey Countersuit in Edge-Sorting Legal Battle

Today, counsel for the parent company for Atlantic City’s Borgata Hotel Casino & Spa, Marina District Development Co., LLC, filed its own legal response to a countersuit filed by prominent poker pro Phil Ivey two weeks ago, in the continuing legal battle over the legality of an “edge sorting” tactic used by Ivey and a sharp-eyed associate to win $9.626 million from the casino over the course of four lengthy mini-baccarat sessions in 2012.

phil-iveyIvey, his associate Cheng Yin Sun, and Kansas-based card manufacturer Gemaco, Inc. are all co-defendants in the action filed by the Borgata last year, which is seeking a legal avenue through which to recoup its losses.  The counterclaim filed by Ivey’s and Sun’s attorneys two weeks ago alleges, among other things, that the Borgata already destroyed most of the cards used in the controversial 2012 mini-baccarat games, and that regardless of their fate, the cards that were used in those games had already been approved for use by New Jersey’s casino regulators.

Today’s filing by the Borgata’s counsel, Jeremy Clausner of the Hackensack, NJ law firm Agostino & Associates, P.C., appears to acknowledge that the cards actually used in at least three of four 2012 sessions have been destroyed or otherwise disposed of, in accordance with standard casino practices and with the approval of state regulators.  Casinos often sell lightly-used cards in their gift shops, give them away to patrons, or donate them to worthy causes.  The exact fate of the specific decks used in the 2012 Ivey sessions appears unlikely to be determined.

As for other claims made on behalf of Ivey and Sun (the cards’ maker, Gemaco, is not a party to the countersuit), the Borgata has responded to those in various ways, exonerating itself of any legal or evidentiary liability while maintaining that all the fraud that went on was done by Ivey and Sun.

Flushdraw has obtained a copy of today’s filing by Borgata’s counsel, and added selective explanatory text as it relates to previous filings in the case:


Plaintiff Marina District Development Co., LLC d/b/a Borgata Hotel Casino & Spa (“Borgata”), through its attorneys Agostino & Associates, P.C., hereby answers the Counterclaims of Defendants Ivey and Sun (“Defendants”) as follows:

Counterclaim Count I

1. Denies the allegations in Paragraph 1, except admits that Plaintiff purchased certain playing cards from Gemaco, Inc. before April 2012. Plaintiff further admits that there were circumstances where Gemaco, Inc. playing cards were delivered in a mis-cut fashion.

2. Denies the allegations in Paragraph 2. [Specifically, Borgata denies this assertion by Ivey and Sun: “Plaintiff Borgata also knew from its historical dealings with Gemaco and other card manufacturers that given the lack of perfection in card manufacturing, all cards, regardless of the manufacturer, were produced and utilized in its casino operations pursuant to standard and acceptable industry tolerances. Plaintiff knew at all times relevant hereto that card backs such as Gemaco’s purple Gem back design was routinely and consistently produced with minor and acceptable design variances, although said cards were fully approved and inspected by the New Jersey Division of Gaming Enforcement, and were further in full compliance with industry standards and tolerances.]

3. Denies the allegations in Paragraph 3. [This is the paragraph where Ivey and Sun claim that the Borgata lied by calling the minor print variations “defects,” when they had allegedly passed pre-play inspection.]

4. Denies the allegations in Paragraph 4, except admits that some of the cards used in the play at issue in this case were destroyed in the regular course of Plaintiff’s business operations, prior to Plaintiff’s becoming aware of Defendants’ scheme and the defect in the playing cards, and pursuant to applicable regulations. [At least 90% of the winnings achieved by Ivey in his 2012 sessions can be traced to decks that both sides now seem to agree have been destroyed or otherwise disposed of.]

5. To the extent the allegations in Paragraph 5 are allegations of fact, Plaintiff denies such allegations. [Borgata denies the claims by Ivey’s attorney that Borgata intentionally destroyed or disposed of the decks in question.]

6. Denies the allegations in Paragraph 6. [Ditto, as in Paragraph 5.]

7. Denies the allegations in Paragraph 7. [Borgata denies that the action of destroying the cards amounts to fraudulent concealment or intentional “spoliation” of evidence, as asserted in the countersuit.]

Counterclaim Count II [This essentially reframes the arguments of Count 1, but within an alleged framework of overall corporate negligence by Borgata.]

1. Plaintiff repeats its answers to the allegations contained in Counterclaim Count I as though set forth in full here,

2. Denies the allegations in Paragraph 2.

3. Denies the allegations in Paragraph 3.

4. Denies the allegations in Paragraph 4.

First Affirmative Defense to Counterclaims

Defendants’ counterclaims fail to state a cause of action upon which relief may be granted.

Second Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred by the explicit admissions of Defendants.  [This refers to public admissions by Ivey and Ivey’s counsel acknowledging that Ivey and Sun did employ a convoluted edge-sorting scheme through which the game’s odds were shifted in their favor.]

Third Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred by the doctrine of unclean hands. [definition]

Fourth Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred because any injury allegedly suffered by Defendants was a result of their own illegal, unfair, and/or bad faith conduct.  [Reasserts that it was Ivey and Sun who committed the fraud, not the Borgata.]


Fifth Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred by the applicable statutes of limitation. [Curiously, Ivey and Sun also raise the statute-of-limitations argument in their own defense against the Borgata’s initial lawsuit.]

Sixth Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred on the ground that there is no private right of action for casino patrons for alleged violations of the New Jersey’s Casino Control Act.

Seventh Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred by Defendants’ fraudulent conduct.  [As claimed by the Borgata in its initial lawsuit.]

Eighth Affirmative Defense to Counterclaims

Defendants’ counterclaims are barred by Defendants’ fraudulent inducement.  [As claimed by the Borgata in its initial lawsuit.]

Ninth Affirmative Defense to Counterclaims

Defendants have failed to plead fraud with particularity.

Tenth Affirmative Defense to Counterclaims

There is no causal relationship between the allegations in Defendants’ counterclaims and their alleged damages.


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