NJ Judge Orders Phil Ivey to Pay $10.13M to Borgata in Edge-Sorting Case

Phil Ivey and co-defendant Cheung Yin “Kelly” Sun have been ordered to pay $10,130,000 in damages to Atlantic City’s Borgata Hotel Casino & Spa to satisfy the summary judgment granted to the Borgata in late October against Ivey and Sun for breach of contract while playing at the Borg’s high-stakes mini-baccarat tables in 2012.

As a result of the adjudged breach, which occurred when Ivey and Sun employed a complex “edge sorting” scheme to switch the odds in their favor, Ivey (the official player of record) was able to win $9,626,000 at the Borgata over four separate multi-day sessions in 2012.

phil-ivey1The damages officially awarded to the Borgata by US District Court Judge Noel L. Hillman also include $504,000 won by Ivey at craps during one of the four casino visits.  That money, the Borgata alleged, was won with funds made immediately available to Ivey due to his concurrent winning at the casino’s mini-baccarat tables.  Judge Hillman agreed with the Borgata’s assertion that the craps win should be nullified under existing New Jersey case law that generally rules that wins can be voided if the bankroll supporting the wagering (in this case, on craps) comes from other illicit activity, under a “fruit of the poisoned tree” premise.

However, Judge Hillman rejected two other parts of the Borgata’s total claim on damages, which if granted could’ve swelled the total ordered to be repaid to more than $15 million.  Hillman disagreed that Ivey should be ordered to repay an additional $249,199.83, the book value of the comps extended to Ivey and Sun over the course of the pair’s four 2012 visits.

As Hillman wrote, “Borgata’s “comps” to Ivey and Sun were provided for many reasons, including to entice a celebrity gambler to its casino to attract more patrons, and to endeavor to win presumably large sums from a high roller.  Because the “comps” were not tied to an obligation that Ivey win or lose, or do anything in particular except to visit Borgata, Borgata is not entitled to the return of the value of those “comps” as part of its breach of contract damages.”

Hillman also ruled against a claim by the Borgata for “expectation damages,” which represented the difference in estimated win or loss by the parties involved based on the normal house edge of the game.  Given the more than 1,800 hands played, at stakes up to $100,000 per hand, the Borgata believes that according to known edges, the casino should have profited by roughly $5.4 million, instead of Ivey winning more than $9.6 million.

Regarding the expectation-damages claim, Hillman wrote, “This theory of damages which focuses on the hypothetical – what the Borgata would have won if the game had not been played with marked cards – fails for the reasons articulated by defendants.  It is simply too speculative to fashion an appropriate remedy.”

Hillman also noted, “[T]his case involves the whims of Lady Luck, who casts uncertainty on every hand, despite the house odds.  Indeed, Lady Luck is like nectar to gamblers, because no one would otherwise play a game he knows he will always lose. We simply don’t know and will never know whether defendants would have beaten the odds in a normal game over those four days, by luck or otherwise, and by what amount.  Any expert calculation is, at best, speculation.  Because Borgata’s expectation damages are not ascertainable to a sufficient degree, such damages are not available here under the common law of New Jersey.”

The overall focus of Hillman’s judgment on damages, was to return the two sides to roughly the status that existed prior to Ivey’s and Sun’s trips to the Borgata in 2012 began.  As Hillman wrote, “The goal of contract law is to put the injured party in as good a position as if performance had been rendered, and a party who breaches a contract is liable for all of the natural and probable consequences of the breach of that contract.”

Hillman reiterated that approach in his conclusion to the order, writing in part, “As we previously found, by their own design, Ivey and Sun played games at Borgata that violated important provisions of the CCA and thereby breached their agreement with the casino. They must disgorge the benefit they received as a direct result of the breached contract, and nothing more, and restore the parties to the status quo ante.”

In a separate order, Hillman also dismissed motions for summary judgment filed by the Borgata and a third co-defendant, Gemaco, Inc., against each other.  Kansas-based Gemaco manufactured the bright purple, “full bleed”-designed cards that were exploited by Sun’s expertly trained vision as part of her and Ivey’s scheme.  The cases were dismissed without prejudice, allowing them to be refiled in case additional developments arise.

COMMENTS

Leave a Comment

*

LATEST NEWS

filter by

Haley Hintze

16th October 2019 // Misc, News

Women in Poker “Cracking Aces” Documentary Arrives on Video

The poker documentary Cracking Aces: A Woman’s Place at the Table, featuring the struggles faced by female poker...

Haley Hintze

16th October 2019 // Legal News, Misc, News

WSOP Flasher Ken Strauss Found Incompetent to Stand Trial

Ken Strauss, the Pennsylvania poker player and sports better who dropped his pants and was disqualified during early...

Haley Hintze

15th October 2019 // Misc, News, Poker Tournaments

Asian Poker Tour Announces 2020 Schedule

The Asian Poker Tour (APT) has announced its schedule of planned tour dates for the 2020 calendar year, offering what...

Haley Hintze

13th October 2019 // Misc, News, Online Poker Action

PokerStars to Introduce Anonymous Tables, Flash Spin & Gos

PokerStars has announced some of the latest bells and whistles to be given a try as the online poker giant continues...

Haley Hintze

13th October 2019 // Misc, News

Four Dead After Shooting at NYC Private Poker Club

Details are still emerging in the shooting deaths of four people, including the alleged shooter, at a private New York...

Haley Hintze

12th October 2019 // Misc, News, Online Poker Action

Partypoker Seizes Another 16 Bot Accounts

Online poker giant partypoker has checked in with the latest update in its nearly year-long publicized battle against...