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What is ‘edge-sorting’ and why did it cost a poker star $10 million in winnings?

Phil Ivey participates in a poker event in Las Vegas in 2005. (Reuters)
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Baccarat, the high-stakes card game popularized by the likes of James Bond and Frank Sinatra, is a game of luck, not skill. Unlike poker, it requires no intuition or creativity. And unlike blackjack, players don’t benefit from a well-rehearsed betting strategy. With a house advantage hovering just above 1 percent, baccarat is more like a glorified coin toss.

Unless, of course, you’re Phil Ivey, the world-famous poker champion who found an ingenious — and, it turns out, prohibited — way to exploit the game.

In 2012, Ivey played marathon rounds of baccarat at casinos in New Jersey and Britain. His winnings were staggering. In four visits to the Borgata Hotel Casino & Spa in Atlantic City, he raked in about $9.6 million. And in a two-day baccarat binge at Crockfords in London, he netted more than $10 million.

When the casinos investigated his alarmingly large haul, they cried foul. Ivey had used a technique called “edge-sorting” that helped him identify beneficial cards from the patterns on their backs. It was cheating, they argued. Ivey admitted using the technique, but he insisted it was perfectly legitimate.

A federal court in New Jersey sided with Borgata last year in a lawsuit to return his winnings there. It wasn’t fraud and it wasn’t exactly cheating, the judge ruled, but the casino was entitled to keep the money.

On Wednesday, Britain’s highest court went even further in a lawsuit Ivey filed against Crockfords, which withheld his winnings. Following multiple appeals, Britain’s Supreme Court ruled that Ivey had in fact cheated and that Crockfords was within its rights to refuse to pay him out.

“The game is one of pure chance, with cards delivered entirely at random and unknowable by the punters or the house,” the five-judge panel wrote. “What Mr. Ivey did was to stage a carefully planned and executed sting.”

The judgment closes the books on the case for the 40-year-old American, who has won World Series of Poker bracelets on ten occasions and has referred to himself the “Michael Jordan” and the “Tiger Woods” of poker.

“At the time I played at Crockfords, I believed that edge-sorting was a legitimate Advantage Play technique and I believe that more passionately than ever today,” he told the Associated Press after the ruling.

“It makes no sense that the U.K. Supreme Court has ruled against me, in my view, contrary to the facts and any possible logic involved in our industry,” Ivey said in a statement. “It is because of my sense of honor and respect for the manner in which gambling is undertaken by professional gamblers such as myself that I have pursued this claim for my unpaid winnings.”

Genting Casinos U.K., which operates Crockfords, told the AP that it was pleased with the ruling.

The “edge-sorting” technique that Ivey employed is as complicated as it is esoteric. Practitioners can identify facedown cards by picking out subtle differences in the patterns on their backs. Ivey and his counterpart in the scheme, a professional gambler named Cheung Yin Sun, did it masterfully.

A New Jersey judge ordered professional gambler Phil Ivey to return $9.6 million to Borgata Hotel Casino & Spa in Atlantic City. Here's why. (Video: Monica Akhtar/The Washington Post)

To most people’s eyes, one facedown playing card is indistinguishable from another. It takes acute vision and lots of practice to tell the cards apart just by examining their reverse sides.

But it is possible. Sometimes during the manufacturing process, the cards are cut in such a way that slightly more pattern shows up on one edge than the other. The difference is “sub-millimetric,” the court wrote, but a player with hawklike vision can perceive which of the two edges is facing him before just before the card is drawn from the dealer’s shoe (the plastic device that holds multiple decks of cards).

Of course, that alone doesn’t help. But the scheme can work if the player convinces the dealer to sort the shoe so that high-value cards are facing one way and low-value cards are facing the other. Hence the term “edge-sorting.”

Ivey and Sun sat down at Crockfords in August 2012 for a private session of Punto Banco, a baccarat variant. They asked for a specific brand of playing cards with a distinct white-circle pattern on the back. In the first round of games, they had the dealer rotate all the sevens through nines — the most valuable cards in baccarat — 180 degrees as they first came out of the shoe. It might seem like a strange request, but casinos often indulge gamblers’ superstitions and good-luck rituals in hopes of keeping them at the table.

Before long, the pair had run through the entire shoe. Ivey asked to keep it rather than swap it out for a new set of cards, saying he had good luck with it. The casino obliged.

With the shoe now sorted to his advantage, Ivey was able to identify the beneficial cards with relative ease. He adjusted his bets accordingly. He started with stakes ranging from 4,000 to 75,000 pounds ($5,385 to $99,096) — a modest amount for a world-class gambler — and gradually went higher, according to the court’s ruling. Over several hours of playing, the accuracy of his betting increased, too.

At the end of a two-day session, he was placing 150,000 pound bets, the maximum the casino permitted. Eventually, the casino told him the shoe had to be replaced. At that point, Ivey left, having won more than $10 million.

The casino discovered the ploy after reviewing surveillance footage and examining the cards. He was denied his winnings. “Nobody at Crockfords had heard of edge-sorting before,” the court wrote.

As his lawsuit wove through the British legal system, Ivey was forthcoming about his actions. He argued “edge-sorting” was “legitimate gamesmanship” that didn’t amount to cheating because it didn’t involve dishonesty.

A lower court judge ruled against him, but said he was convinced that Ivey truly believed he wasn’t cheating and thanked him for his “factually frank and truthful evidence.”

The high court was asked to weigh in on “the meaning of the concept of cheating at gambling,” and decide whether dishonesty was an essential element of cheating. It upheld the lower court’s ruling, finding that what Ivey believed ultimately didn’t change the fact that, under the law, he had cheated.

“If he had surreptitiously gained access to the shoe and rearranged the cards physically himself, no one would begin to doubt that he was cheating,” the judges wrote. “He accomplished exactly the same result through the unwitting but directed actions of the croupier, tricking her into thinking that what she did was irrelevant.”

It would have been different if Ivey had spotted differences in the backs of the cards through simple observation, the court ruled. But instead he took deliberate steps to fix the deck.

“That, in a game which depends on random delivery of unknown cards, is inevitably cheating,” the judges wrote. “That it was clever and skillful, and must have involved remarkably sharp eyes, cannot alter the truth.”

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