Out-Law / Your Daily Need-To-Know

Out-Law News 3 min. read

Casino wins right to withhold £7.7 million of winnings from card game 'cheat'


A professional gambler who sued a casino for withholding millions of pounds in winnings from a card game has lost his case before the UK's highest court.

The Supreme Court rejected Phillip Ivey's appeal against a November 2016 ruling by the Court of Appeal which held that he had breached an implied contract with Crockfords Club casino in London not to cheat when he deployed a form of 'advantage play' to win more than £7.7m playing the card game Punto Banco.

"This is a significant moment for the gambling industry – for the first time, the Gambling Act concept of 'cheating' has been considered in respect of implied contractual obligations to play fair," gambling law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com said.

"According to today’s judgment, even honest cheats can fall foul of gambling contracts and, potentially, gambling law. From now on professional gamblers will need to be mindful of whether the skill and knowledge they use to beat the house could be construed as unfair interference with the process of the game," she said.

In its judgment (28-page / 365KB PDF), the Supreme Court described how Ivey "took positive steps to fix the deck" by directing the croupier in a way which enabled him to engage in 'edge sorting' without physically touching the cards himself. Edge sorting "involves exploiting design irregularities on the backs of playing cards", the Court of Appeal said in its ruling.

Ivey claimed that he had acted honestly and could not therefore be classed as having cheated.

However, the Supreme Court said that it is not necessary to show that a gambler has been dishonest to determine they have cheated.

"Although the great majority of cheating will involve something which the ordinary person (or juror) would describe as dishonest, this is not invariably so," the Supreme Court said. "When, as it often will, the cheating involves deception of the other party, it will usually be easy to describe what was done as dishonest. It is, however, perfectly clear that in ordinary language cheating need not involve deception."

The Supreme Court said that this distinction is recognised in gambling law.

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.

Crockfords had previously claimed that Ivey was guilty of the offence of cheating under the Gambling Act, but the Court of Appeal previously, and the Supreme Court now, did not rule on the issue.

The Supreme Court confirmed, however, that Ivey had breached an implied contract he had with Crockfords not to cheat.

"It may be that it would not be cheating if a player spotted that some cards had a detectably different back from others, and took advantage of that observation, but Mr Ivey did much more than observe; he took positive steps to fix the deck," the Supreme Court said. "That, in a game which depends on random delivery of unknown cards, is inevitably cheating. That it was clever and skilful, and must have involved remarkably sharp eyes, cannot alter that truth."

Despite finding that it is not necessary to establish dishonesty to determine whether a gambler has cheated, the Supreme Court considered the legal tests for determining dishonesty in criminal and civil cases.

The Court of Appeal had described Ivey as behaving honestly after determining he had spoken the truth when he said he did not believe his edge sorting amounted to cheating. However, the Supreme Court said that it was wrong to automatically associate truthfulness with honesty.

The Supreme Court said: "It is a fallacy to suggest that [the Court of Appeal's finding] that Mr Ivey was truthful when he said that he did not regard what he did as cheating amounted to a finding that his behaviour was honest. It was not. It was a finding that he was, in that respect, truthful. Truthfulness is indeed one characteristic of honesty, and untruthfulness is often a powerful indicator of dishonesty, but a dishonest person may sometimes be truthful about his dishonest opinions."

"For the same reasons which show that Mr Ivey’s conduct was, contrary to his own opinion, cheating, the better view would be, if the question arose, that his conduct was, contrary to his own opinion, also dishonest," it said.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.