Wednesday, April 30, 2014

Here's a New Twist on Baccarat Cheating

With all the huge baccarat cheating scandals we've been hearing about the last decade, everything from the Tran Organization multi-national dealer-corruption $30 million false-shuffle scam to Phil Ivey's multi-million-dollar baccarat edge-sorting scams, it's refreshing, at least to me, to hear of a simple if not stupid one.

A casino cheat in New Zealand hit the baccarat tables there with a past-posting attack. When he was caught he simply said that he wasn't aware of his cheating because the dealers were accepting his past-posted bets. Well, I kinda like that excuse!


A man accused of cheating while playing baccarat at SkyCity casino is bewildered by the charges and said he lost $25,000 there in a year.Petronius Linsao Cortez, 52, appeared in Auckland District Court today on nine charges after a night at the casino on Sunday.Court documents said the Glenfield resident "knowingly contravened the rules of the game . . . by placing bets after the outcome had already been determined".
Cortez said he was unaware he had acted illegally and was confused when security marched him upstairs and contacted police.

"The dealer, he's the one that controls the table, and he was accepting those late bets," he said.
When asked how much he had won from the casino, the father of three was candid with his response.
"Actually I'm losing a lot there," Cortez said."I'm very unlucky at the moment."

Filipino-born Cortez, who has worked as a machine operator since coming to New Zealand in 2000, said he had been going to SkyCity about once a week for the last year.He started off playing black jack but recently moved on to baccarat, hoping for a change of luck.That did not come and Cortez said he was down about $25,000 - "all blown away in the casino".

Baccarat is a card game played by a minimum of two punters and a banker, who all aim to have two or three cards totalling nine.

SkyCity would not comment on the case as it was before the courts, nor would they discuss the security systems used to catch the alleged offender. "Undesirable activity potentially attracts a maximum ban of up to two years," a spokeswoman said.Though she would not disclose the penalty against Cortez, he told Fairfax Media he had been slapped with a two-year ban.But he was far from disappointed with the outcome.
"I think this is the wake up call I needed. They excluded me so this is probably the lesson for me to stop," he said.

Cortez will be back in court next month and he said in the interim he would speak to a lawyer and decide whether to defend the charges. Making it up to his wife was also on the cards."I need to buy her flowers," Cortez said.

The charge of contravening the Gambling Act by cheating is a rare one - only 10 people have faced the charge in the last five years.

Monday, April 28, 2014

Casino Legal Expert I. Nelson Rose on Phil Ivey Cheating Case

One very important voice on the Phil Ivey baccarat edge-sorting casino-cheat case is that of I. Nelson Rose, an independent attorney who has testified in many casino and poker cheating cases, many of which have come down to a simple definition of what constitutes casino and poker cheating and what does not. Rose recently gave an interview about Phil Ivey and the cheating implications.

The man known as the world's foremost expert on gambling law tells in an exclusive interview that what Phil Ivey did while playing baccarat at the Borgata casino is not cheating because, "It's up to the casino to make sure that there are no readable markings on the backs of cards." on Tuesday spoke with I. Nelson Rose, an attorney and professor at Whittier Law School in California who teaches classes in gambling law and is considered the world's top expert on the subject, about the Phil Ivey case.

Ivey last week was sued by the Borgata casino in Atlantic City, New Jersey, USA, for millions of dollars in baccarat earnings that he won at the casino two years ago and that Borgata claims he won fraudulently by using a cheating scheme called edge sorting.

Edge sorting involves noticing subtle differences in the designs on the backs of playing cards and using that information to recall values of cards and bet accordingly. "Edge sorting has been around for decades," Rose told "I was called in as an in a marked card case and one of the first things I did was look to see if there was a pattern to the design on the back of the cards. "Cheats can easily create a deck of cards they can read by buying many decks of cards with a simple pattern, like diamond shapes, and then creating a single deck where, say, only the ten-count cards have full diamonds in the corners." But in a casino, he said, it is the responsibility of the casino to make sure everything in a game is ship-shape, not the player.
"It is up to the casino to make sure that there are no readable markings on the backs of cards," Rose said. "I remember touring the Sands casino in Macau the month it opened and looking into the room where employees destroyed cards after a single use. Ivey used information available to all players," he said. "By definition that was not cheating."

Rose's interpretation of the case may carry some weight if and when the lawsuit sees a courtroom.
Rose, 64, has testified as a prosecution or defense witness in dozens of criminal cases involving gambling and has also testified in numerous civil lawsuits involving gambling. He has also authored several books about gambling and the law, writes a gambling law column for his website and there is a waiting list to enroll in his classes, which draw prospective law students from around the world and are the only gambling-specific law courses offered at any American university or college.

My take: Pretty good view but I must make one clarification of Rose's statements. He says that edge-sorting has been around for decades, but he did not point out that it has never before been brought to light with unaltered cards coming out of the factory, at least to my knowledge.

For Those Who Support Phil Ivey Against Casino Cheating Allegations

As most of you know by now, I believe that Phil Ivey is guilty of casino cheating in both his edge-sorting cases at the Borgata casino in Atlantic City and Crockfords casino in London. However, many casino-cheating experts favor Ivey and outright disagree with me. Here is one very good article in support of Phil Ivey written by Aaron Todd.

"Last week we learned that the Borgata Hotel Casino and Spa is suing Phil Ivey for $9.6 million, the amount he won from the casino playing baccarat in 2012. Unfortunately, many journalists (or at the very least, headline writers) have characterized Ivey's play as cheating.

I'm not a lawyer, so I won't make a prediction about what will actually happen in this case. But I know what should happen: Ivey should keep the money, and the Borgata should sue only Gemaco (the manufacturer of the playing cards that made Ivey's advantage play possible), or take its medicine and learn a $9.6 million lesson.

Here are the top-10 reasons I believe it's incorrect to say Ivey "cheated" at the Borgata.

10. Casinos are responsible for keeping information from the players
If a blackjack dealer unintentionally reveals that the first card off the shoe for the next hand is an ace and bets are still open, is it cheating for the player at first base to increase his bet? The player is using information that the casino didn't protect and is betting accordingly. That's not cheating.

Similarly, if a player learns that a roulette wheel is biased and uses that information to profit, is the player cheating? In this case, the casino didn't ensure that the equipment was perfect.

In Ivey's case, the Borgata was using imperfect equipment, and he was able to get the casino to provide him with enough information to get an edge on the game. That's not cheating, in my mind. That's a case of ineffectual game management on the part of the casino.

9. The casino used faulty cards
Should Ivey be blamed because the casino's quality control failed to recognize that the cards they used were faulty? If the Borgata wants to sue Gemaco, I'm all for it.

The casino does everything it can to squeeze every bit of a house edge from its players, and then sues players for doing the same to the casino? Sounds a bit hypocritical to me.

8. Ivey didn't mark the cards
If Ivey had physically marked the cards, that would be cheating. But instead, his companion, Cheng Yin Sun, merely asked the dealer to turn the cards in one direction or another, which made the cards identifiable. Since the cards themselves were unaltered, I don't believe this is cheating.

7. The dealer didn't have to comply with the request
This is the key distinction. The dealer didn't have to comply with Sun's request; or perhaps more importantly, the floor should have told the dealer not to comply.

6. An automatic card shuffler is not a "cheating device"
The most ridiculous claim in the Borgata lawsuit is that Ivey and Sun used the automatic card shuffler as a "cheating device." According to New Jersey gaming law, a cheating device is "a computerized, electronic, electrical or mechanical device which is designed, constructed, or programmed specifically for use in obtaining an advantage at playing any game in a licensed casino or simulcasting facility."

A card shuffler is used to shuffle cards. It is not designed for use in obtaining an advantage. Just because the dealer and/or the floor didn't give the cards a wash before putting them into the machine doesn't make it a cheating device.

5. "Misrepresenting motive" isn't cheating
Ivey's reasoning for all the terms he laid out was that he was superstitious. I'm superstitious, too, in that I believe that when I play games with a house edge, I'm likely to lose and when I play games where I have an edge, I'm more likely to win. Saying he was superstitious to gain an edge in a casino game doesn't make what he was doing illegal. He wasn't in front of a grand jury; lying to casino executives may break one of the Ten Commandments, but it's not against the law unless you're under oath.

4. Fool me once, shame on you; fool me four times, shame on me
The part of this story that I find most incredible is that not only did the Borgata allow Ivey to set his own terms once, but after he took the casino for $2.4 million the first time around, they let him return under the same terms three more times. They even let him increase his maximum bet from $50,000 per hand to $100,000 per hand. The Borgata could learn a thing or two from George W. Bush.

3. He was still gambling
The Borgata's lawsuit against Ivey claims that "Ivey and Sun succeeded in manipulating the Baccarat game to deprive the game of its essential element of chance." But according to that same lawsuit, Ivey succeeded only in flipping the house odds from 1.06 percent in the house's favor to 6.765 percent in his favor.

Obviously, playing a game with an expected return of 106.765 percent is a great deal for the player. But it's not a guarantee that he will win. I can find plenty of bets in a casino that have a much higher edge than 6.765 in favor of the house. If those games are considered games of chance, one with the same odds in favor of the player should also be considered a game of chance.

Yes, rigging a slot machine to ensure a jackpot payout on the next spin isn't gambling. But betting $100,000 when you only have a 6.765 percent edge is still gambling in my book.

2. If Ivey had lost money, would the casino still be suing?
Given the length of the sessions and the number of hands Ivey was playing each time, it's highly unlikely, but still possible, that Ivey could have ended up losing money, even with a theoretical 6.765 percent edge. If he had lost money, would the Borgata be suing over the difference that they believed they should have won? Who is to say that Ivey wouldn't have won a little bit anyway? What are the actual damages? It's nearly impossible to compute.

1. The Borgata agreed to Ivey's terms
This is the only argument that matters, in my mind. The Borgata agreed to Ivey's terms. The casino is always in charge; they run the game. If it decides to run the game in such a way that a sharp player is able to take advantage, that's its own fault.

Lick your wounds, take your medicine and don't do it again, Borgata. Even if you manage to win due to some legal technicality, this is going to kill your reputation.

As gambling law expert I. Nelson Rose said in a separate casino/player dispute in New Jersey, "It's a contract; it's a binding contract and they have to pay off. And if they don't pay off, let's say for some technicality, then they're going to get a reputation that they don't pay off. You not only have to beat them in a game of chance, you also have to beat them in court. And that's not a smart way to market your casino."