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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Ivey v Genting Casinos UK Ltd (t/a Crockfords Club)  EWCA Civ 1093 (04 November 2016)
Cite as:  WLR 679,  LLR 128,  WLR(D) 569,  1 WLR 679,  EWCA Civ 1093,  1 Cr App R 16
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ON APPEAL FROM
THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Mitting
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE TOMLINSON
LADY JUSTICE SHARP
| PHILLIP IVEY
|- and -
|GENTING CASINOS UK LIMITED
T/A CROCKFORDS CLUB
Christopher Pymont QC and Siward Atkins (instructed by Kingsley Napley LLP) for the Respondent
Hearing date: 13 April 2016.
Further submissions lodged: 9, 17 and 20 May 2016
Crown Copyright ©
LADY JUSTICE ARDEN:
Core issue: is edge-sorting legitimate play or cheating if used when playing Punto Banco?
Punto Banco and the meaning of edge-sorting
4. Punto Banco is a variant of Baccarat. It is not normally, to any extent, a game of skill. Eight decks or, in English nomenclature, packs, sometimes six, of 52 cards are dealt from a shoe [card holder used by the dealer], face down by a croupier. She deals the cards in a sequence from which no deviation is permitted to two positions on the table in front of her, marked 'player', the 'Punto' in the name, and 'Banker', 'Banco': one card to player, one to banker; a second to player and a second to banker. In prescribed circumstances she must deal one further card, either to player or to banker or to both.
5 The basic object of the game is to achieve, on one of the two positions, a combination of two or three cards which, when added together, is nearer to nine in total than the combination on the other position. Aces to 9 count at face value, 10 to King inclusive count as nothing. Any pair or trio of cards adding up to more than 10 requires 10 to be deducted before arriving at the counting total. Thus 4 plus 5 equals 9, but 6 plus 5 (which equals 11) equals only 1.
6 Punters bet before any card is dealt and can bet on player or banker. Winning bets are paid at evens on player, and at 19 to 20 on banker. It is possible to bet on a tie. In the event of a tie, all bets on player or banker are annulled, in other words, the punter keeps his stake and the only bet paid out on is the tie at odds set by the casino of either eight to one or, at Crockfords, nine to one. It is possible to place other types of bet, but this case does not concern them and it is unnecessary for me to describe them.
7 The house edge in Punto Banco is 1.24% if player wins and 1.06% if banker wins. The counter intuitive difference is accounted for by the different rules which apply to drawing a third card for player or banker. The play of each sequence of two or three pairs of cards is known as a 'coup'.
8 Before play begins, the cards are cut to eliminate a proportion of the shoe from those to be played. The cut is effected by placing a blank divider between the bulk of the shoe and the remaining cards. Traditionally, seven cards out of 416 were cut from the shoe, but some casinos routinely eliminate more, typically about one deck of 52 cards. The croupier can deal a fresh shoe of cards as each is exhausted, or, after reshuffling, reuse the same cards.
9 The claimant aided by another professional gambler, Cheung Yin Sun (Ms Sun), played 15 shoes of Punto Banco at Crockfords Club in Mayfair on the afternoon and night of 20 to 21 August 2012 and on the afternoon of 21 August. He won just over £7.7 million. There is no dispute about the means which he used to achieve that win, a technique known as 'edge-sorting'.
10 A deck of 52 playing cards is manufactured so as to present a uniform appearance on the back and a unique appearance on the face. The backs of some cards are, however, not exactly uniform. The backs of many packs of cards for social use have an obvious top and bottom, for example, the manufacturer's name may be printed once only, or the pattern may be obviously the right way up and upside down. In casino games in which the orientation of the back of the card may matter, cards which are in principle indistinguishable whichever way up they are when presented in a shoe are used. Cards with no pattern and no edge present no problem, they are indistinguishable. However many cards used in casinos are patterned. If the pattern is precisely symmetrical the effect is the same as if the card is plain: the back of one card is indistinguishable from any other. But if the pattern is not precisely symmetrical it may be possible to distinguish between cards by examining the backs.
11 'Edge-sorting' is possible when the manufacturing process causes tiny differences to appear on the edges of the cards so that for example, the edge of one long side is marginally different from the edge of the other. Some cards printed by Angel Co. Ltd for the Genting Group (which owns Crockfords) have this characteristic. The machine which cuts the card leaves very slightly more of a pattern, a white circle broken by two curved lines, visible on one long edge than on the other. The manufacturers assert that this is not a defect but is within a contractually specified tolerance of up to 0.3 millimetres. Before a card is dealt from a shoe, it sits face down at the bottom of the shoe, displaying one of its two long edges. It is possible for a sharp-eyed person sitting close to the shoe to see which long edge it is. The information thus gained is only useful to the punter if he knows or has a good idea of what the card is.
12 In Punto Banco cards with a face value of 7, 8 and 9 are high value cards. If one such card is dealt to player or to banker, it will give that position a better chance of winning than the other. Thus a punter who knows that when the first card dealt, always to player is a 7, 8 or 9, he will know that it is more likely than not that player will win. If he knows that the card is not a 7, 8 or 9, he will know that it is more likely than not that banker will win. Such knowledge, it is agreed, will give the punter a long-term edge of about 6.5% over the house if played perfectly accurately.
13 According to Dr Jacobson, a former Professor of Mathematics, currently an expert adviser to the gambling industry, the house edge on any particular coup varies and is not precisely the long-term edge thus described. It may be between 4.5% and 7%, using the edge-sorting technique which I have described. I accept his evidence.
14 Three conditions must occur before the punter can gain that knowledge:
(1) the same shoe of cards must be used more than once;
(2) cards with a face value of 7, 8 or 9 must be turned through 180 degrees by comparison with all other cards;
(3) when reshuffled no part of the shoe must be rotated. Step (2) is the process known as edge-sorting.
15 As the claimant frankly, and without hesitation, admitted, if the casino realises that cards with a face value of 7, 8 or 9 are being turned, it will take one or more of the simple steps needed to avoid giving the punter an advantage: by covering the base of the shoe so that the leading edge is not visible before bets are placed; by only using one shoe of cards; or by turning a significant proportion of the cards when reshuffling. It is therefore essential for edge-sorting to work that the croupier does not realise that cards with a face value of 7, 8 or 9 have been differentially sorted unless of course she is complicit, of which there is no suggestion in this case whatever. Two people can rotate the cards – the punter or the croupier. If the punter touches the cards, most casinos will not permit that shoe to be reused. That is Crockfords' invariable practice.
16 For edge-sorting to work at Crockfords it is therefore essential that the croupier is persuaded to rotate the relevant cards without her realising why she is being asked to do so. Casinos routinely play on quirky and superstitious behaviour by punters. It is in the casino's interests that punters should believe, erroneously, that a lucky charm or practice will improve their chance of winning and so modify or defeat the house edge. Consequently a wide variety of requests by punters, particularly those willing to wager large sums on games which they must in the long run lose, are accommodated by casinos without demur or surprise.
It is ultimately for the court to decide, as it must in the case of the standard of honesty to be expected in dealing of businessmen and trustees, whether or not conduct amounts to cheating.
50. …(1) He gave himself an advantage, throughout the play of the sixth and subsequent shoes, which the game precludes – knowing, or having a good idea, whether the first card was or was not a 7, 8 or 9. That is quite different from the advantage which may accrue to a punter as a result of counting the cards, so that very near to the end of the shoe he may obtain a legitimate advantage by doing so.
(2) He did so by using the croupier as his innocent agent or tool by turning the 7s, 8s and 9s differentially. He was not simply taking advantage of an error on the part of the croupier or an anomaly produced by a practice of the casino for which he was not responsible.
(3) He was doing so in circumstances in which he knew that she and her superiors did not realise the consequence of what she had done at his instigation. Accordingly, he converted a game in which the knowledge of both sides as to the likelihood that player or banker will win – in principle nil, – was equal into a game in which his knowledge is greater than that of the croupier and greater than that which she would reasonably have expected it to be.
51 This in my view is cheating for the purposes of civil law. …
Overview of this judgment
Mr Ivey's "no dishonesty" submission: no cheating without subjective dishonesty
In East's Pleas of the Crown vol. II the author stated that in his view the common law offence of cheating consisted in:
"the fraudulent obtaining of the property of another by any deceitful or illegal practice or token (short of felony) [which affects or may affect the public.]…"
Every person who shall, by any fraud or unlawful device or ill practice in playing at or with cards … win from any other person to himself … any sum of money or other valuable thing from such other person by a false pretence, with intent to cheat or defraud such person of the same …
Crockfords' case: sufficient that Mr Ivey's actions disturbed the balance of chance
Section 42 does not require dishonesty
Other statutes criminalising cheating also show dishonesty is not essential
Interference with the process of the game
Dictionary meaning of "cheat"
My conclusion: there may be cheating without dishonesty
Interpretation of section 42
Earlier authorities provide some support for this conclusion
And although the defendant do not entice the plaintiff to play, yet if the defendant play with false dice, &c. by which he gets the plaintiff's money; it seemeth the plaintiff may maintain this action well enough, because the enticement is not the cause of the action, but the casting of the false dice, by which he gaineth the money, &c.
Is there a civil law concept of cheating?
..it was ultimately for the court to decide, as it must in the case of the standard of honesty to be expected in dealing of businessmen and trustees, whether or not conduct amounts to cheating. The standard is objective. See, for example, paragraph  of Starglade Properties Ltd v Nash  EWCA Civ 1314, per the Chancellor of the High Court. I accept and follow his statement that, 'ultimately in civil proceedings it is for the court to determine what that standard is and to apply it to the facts of the case'. (Judgment, )
Conclusion: interference with the process of the game may be enough
Mr Ivey's "advantage player" submission
I am an advantage play purist – we are all very careful to stay the right side the line and we discuss advantage play strategies at length. The fundamental principles of advantage play are:
(i) that we seek every mathematical advantage including targeting the weaknesses of the casino, and seek every psychological advantage by employing necessary gamesmanship, bluff and strategic deception to disguise our skill. An example might be by initially giving the house the impression that you are a poor player by making bad bets at strategic times, or by making request of the casino based on luck or superstition, when in fact they are designed to help you in trying to gain an edge over the house;
(ii) that we only consider the information provided to us and that was made available to all players at the table;
(iii) that we will never employ devices or "spotters" (a "spotter" is an individual who, amongst other things, provides information to a player from off the table about unintentionally exposed cards during the shuffle, cut or dealing of the game);…
Crockfords' submission: their lack of knowledge of the advantage player's intentions is crucial
My conclusions on the "advantage player" submission
Legislation against, or controlling, gaming, wagering and betting is many centuries old in the United Kingdom. With only moderate success Parliament has endeavoured to keep up with the enormous variety of these activities which has arisen from the ingenuity of gamblers and of people who exploit them. It is impossible to frame accurate definitions which can cover every such variety: attempts to do so may indeed be counter-productive, since each added precision merely provides an incentive to devise a variant which eludes it. So the legislation contains a number of expressions which are not, or not precisely defined: bet, wager, lottery, gaming, are examples of this. As to these, while sections appear in various Acts saying that a particular activity is, or is deemed to be, within the word, the general meaning is left to be decided by the courts as cases arise under the common law. (Seay v Eastwood  1 WLR 1117, 121)
Was the judge wrong in his assessment of the facts as constituting cheating?
Respondent's notice – was dishonesty and deception shown?
Judgment of Lady Justice Sharp
Summary of my conclusions
'(1) A person commits an offence if he—
(a) cheats at gambling, or
(b) does anything for the purpose of enabling or assisting another person to cheat at gambling.
(2) For the purposes of subsection (1) it is immaterial whether a person who cheats—
(a) improves his chances of winning anything, or
(b) wins anything.
(3) Without prejudice to the generality of subsection (1) cheating at gambling may, in particular, consist of actual or attempted deception or interference in connection with—
(a) the process by which gambling is conducted, or
(b) a real or virtual game, race or other event or process to which gambling relates.
(4) A person guilty of an offence under this section shall be liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both, or
(b) on summary conviction, to imprisonment for a term not exceeding 51 weeks, to a fine not exceeding the statutory maximum or to both.
(5) In the application of subsection (4) to Scotland the reference to 51 weeks shall have effect as a reference to six months.
(6) Section 17 of the Gaming Act 1845 (c 109) (winning by cheating) shall cease to have effect.
Lord Justice Tomlinson:
"His purpose, which succeeded, was no more and no less than to try to ensure that the casino staff, and in particular Ms Yau and her immediate supervisor, Mr. Hillier, did not depart from the usual practice of humouring high stakes gamblers by acceding to a request which did in their view not affect the outcome of the game. But it did. What the claimant and Ms Sun did was to persuade Ms Yau to turn some of the cards in a shoe so as to permit them to know that they were or were very likely to be - 7s, 8s or 9s - and to do so in circumstances in which they knew that she did not realise that she had done so and that if she had, she would immediately have stopped play and sought the advice of her supervisors who would inevitably have put an end to it."
Lady Justice Sharp:
"Where the crime consists of doing an act which is prohibited by statute the proposition as to the state of mind of the doer which is contained in the full definition of the crime must be ascertained from the words and subject-matter of the statute. The proposition, as Stephen J. pointed out, may be stated explicitly by the use of such qualifying adverbs as "maliciously," "fraudulently," "negligently" or "knowingly" - expressions which in relation to different kinds of conduct may call for judicial exegesis. And even without such adverbs the words descriptive of the prohibited act may themselves connote the presence of a particular mental element."
(1)A person commits an offence if he—(a) cheats at gambling, or
(b) does anything for the purpose of enabling or assisting another person to cheat at gambling.
(2) For the purposes of subsection (1) it is immaterial whether a person who cheats—(a) improves his chances of winning anything, or
(b) wins anything.
(3)Without prejudice to the generality of subsection (1) cheating at gambling may, in particular, consist of actual or attempted deception or interference in connection with—(a) the process by which gambling is conducted, or
(b) a real or virtual game, race or other event or process to which gambling relates..."