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UK court rules gambler's 'advantage play' constitutes 'cheating'

A gambler does not need to behave dishonestly to be considered to be cheating under British gambling laws, the Court of Appeal in London has said.07 Nov 2016

The Court ruled that a professional gambler had breached an implied contract with a casino when he deployed a form of 'advantage play' to win more than £7.7 million playing the card game Punto Banco.

Phillip Ivey admitted he used 'edge-sorting', which according to the Court of Appeal judgment "involves exploiting design irregularities on the backs of playing cards", to gain an advantage over Crockfords Club casino when playing the game in August 2012.

Ivey claimed he used legitimate gamesmanship to convince casino staff to rotate the cards to exploit the edge-sorting method and that the casino should have been aware of the technique and that it could protect itself against its use. He further claimed that cheating requires "a dishonest state of mind" and that he because he was of the "honest belief that his actions were not cheating" his play could not be considered as that of a cheat.

However, Crockfords argued that it was unaware of the edge-sorting method at the time of Ivey's winnings and that use of the technique unfairly altered the odds of the Punto Banco game against it.

The three Court of Appeal judges considered whether Ivey's play constituted cheating under the Gambling Act of 2005. Lady Justice Arden and Lord Justice Tomlinson ruled that it did, while Lady Justice Sharp raised a dissenting minority opinion against that view.

A central point of disagreement in the case concerned whether British gambling laws require a gambler to have behaved dishonestly in order for their conduct to be considered cheating.

Gambling law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, said the case is likely to go to the Supreme Court for the issues to be finally settled and to bring some clarity to the interpretation of section 42 of the Gambling Act.

It is an offence, under section 42 of the Gambling Act, to cheat at gambling or do anything for the purpose of enabling or assisting another person to cheat at gambling. A gambler can be considered to be committing an offence of cheating even if they do not win anything or improve their chances of winning anything by engaging in the activity.

According to the Act, cheating at gambling "may, in particular, consist of actual or attempted deception or interference in connection with the process by which gambling is conducted, or a real or virtual game, race or other event or process to which gambling relates".

A maximum prison sentence of two years, as well as a fine, can be imposed on those convicted of cheating at gambling.

Lady Justice Arden said that she does not "consider that dishonesty is a necessary ingredient of the criminal offence of cheating" and that "interference with the process of the game without proof of dishonesty may be enough to constitute cheating for the purposes of [the Gambling Act]".

The judge said: "I do not consider that the ordinary meaning of cheating is restricted to dishonest cheating, and the references to unfairness in the definition of cheating in the Concise Oxford English Dictionary … supports this conclusion… That is not to say that dishonesty is never relevant. Cheating may, and perhaps in most cases will, involve dishonesty, but it need not do so. Whether interference with the process of the game amounts to cheating in any particular case is a matter for a common sense judgment having regard to the ordinary meaning of 'cheat'."

"Ivey achieved his winnings through manipulating Crockfords' facilities for the game without Crockfords' knowledge. His actions cannot be justified on the basis that he was an advantage player," she said.

The conclusion that Ivey had cheated was supported by Lord Justice Tomlinson, who reached that view despite being "surprised" that Crockfords was unaware of the practice of edge-sorting and that its staff had not "suspected at the time that the integrity of the game was being compromised".

"I have given careful consideration to Mr Ivey's contention that he was doing no more than taking advantage of shortcomings in the procedures of the casino," Lord Justice Tomlinson said. "However the same could be said of any number of situations in which cheating would ordinarily be acknowledged to be taking place. Crockfords may have been there for the taking, but they were, by deception, unwittingly led into an interference with the conduct of the game which deprived it of its essential character as a game in which bets are placed on the outcome of pure chance."

"I cannot conclude that Crockfords' surprising ignorance or even naiveté transforms Mr Ivey's conduct into something other than cheating. Indeed, if anything it reinforces my conclusion that Mr Ivey was consciously and deceptively transforming the essential nature of the game in a manner not appreciated by the banker," he said.

In her dissenting minority opinion, Lady Justice Sharp said it was wrong to consider someone a 'cheat' under the Gambling Act if they had behaved honestly.

"I find the suggestion that someone can be guilty of the criminal offence (in effect) of 'honest cheating' at gambling to be a startling one which is not mandated by the language of the statute itself," she said.