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The Ivey Baccarat Hack:

Defective decks had non-uniform edge pattern, dealer rotated certain cards at Ivey's open request, mechanical shuffler left cards in same orientation... allowing Ivey to read some obscured/upcoming cards after reshuffles.

I say "well played." If this is the case, it seems perfectly fair and their own fault for not stacking the odds in their favor as is done the other 99.9999% of the time. Fair's fair and it was their own equipment that screwed up, so I don't see how this could be cheating, it sounds more like sour grapes from sore losers.
"The lawsuit claims that Ivey and his companion instructed a dealer to flip cards in particular ways, depending on whether it was a desirable card in baccarat."

If that's true, it sounds like a really obvious way to cheat. Maybe he didn't realize there was actually a specific regulation against it and figured the worst they could do was kick him out. Otherwise it seems like he'd be a bit more circumspect.

It seems odd that the dealer would comply with such a request, even if the dealer has no idea about the law.
Presumably some gamblers have superstitious practises regarding their luck. It's quite possible the dealer could have seen this as one and assumed it harmless wanting to keep them playing.
Ivey does indeed have a reputation for being superstitious. Worth noting the stakes for some of these games were in the $50,000 - $100,000 range, per hand. It's pretty hard to say no to a seemingly harmless request when the stakes are that high.
I guess, but all the other stuff about cards appears to be tightly regulated.

Interesting to see people fi ding and exploiting these flaws. Surprising that people are still making casino cards with these backs when this exploit appears to be known about.

Dealers work on tips though.
At the stakes Ivey plays there is always at least a pit boss nearby monitoring all the action, so in this case not only did the dealers comply but the pit boss either implicitly or perhaps even explicitly approved it as well.

On the other hand at these stakes every casino staff member will go way out of their way to comply with any request from the player.

In these cases the pit bosses must not have been aware of the concept of edge sorting or surely they would not have allowed it. I'm surprised that a higher end casino like Borgata that regularly faces this level of action doesn't train their high limit floor staff better.

Ivey has a reputation for being superstitious, and plays incredibly high stakes, usually at private tables. Generally Casino's will comply with strange requests like this from people like him, assuming it is just a weird superstition/luck thing.

Worth noting, having the cards flipped wouldn't work if the decks were being manually sorted, in at least one case he convinced the casino to use an automatic sorter, which retains the orientation of the cards, again probably a request chalked up to superstition.

in at least one case he convinced the casino to use an automatic sorter, which retains the orientation of the cards, again probably a request chalked up to superstition.

In my state, using a device (computer, electronic, or mechanical) to track cards that were dealt or project the outcome of the game is a class "D" felony and results in being barred for life from any casino operating under the jurisdiction of the racing and gaming commission of the state. The law does not appear to care if this device is provided by the casino itself, it is strictly forbidden to use any device (even one you don't physically possess) for that purpose.

If these claims are true, and hypothetically if Ivey was in the State of Iowa (but similar laws exist elsewhere I am certain), I am wondering if he committed a criminal offense by his action of requesting the casino use a device (they otherwise wouldn't have used) so that he could a) keep track of cards dealt and b) project the outcome of the game.

Based solely on your comment I would guess not. The device wasn't used "to track cards that were dealt or project the outcome of the game". Rather, it simply didn't prevent Ivey from doing so (allegedly).
I went to Gemeco website to have a look at the card backs.

http://www.gemacocards.com/casino/

Clicking on the cardback link opens a page which crashes Chrome on iOS.

So, uh, does anyone have a screenshot of the specific backs?

It looks as if the "bleed to edge" version of the "gemback" pattern does in fact have a left/right asymmetry, with one side showing more of the partial pattern at the edge than the other. It seems like this is what the description of flaw in the article is referring to.
It blows my mind that any casino in the world could be a victim of edge sorting.

See: http://apheat.net/2012/06/28/what-is-edge-sorting/ for details, but basically, the Borgata Casino was pretty much grossly incompetent if they were dealing asymmetric decks.

I imagine it's a case of the casino's just assuming the card manufacturer is up to spec, and having no, or limited in house quality check on the cards. I imagine most people who handle the cards would look for markings made by players, and assume everything else is as it should be. Looks like the manufacturer in this case is already being sued by a couple of casinos (Borgata included), and I imagine more are incoming.
Reading through discussions of "edge sorting" - it turns out that most decks are manufactured with an asymmetry, and the simple act of cutting the deck and doing a "turn" prior to sorting dealing, prevents an asymmetric pattern that can be leveraged by players. This was just poor practice by the casino - you would think that the various Pit Bosses would ensure that the dealers were turning the cards...
Your logic doesn't make any sense. We don't pasteurize milk if and only if the supplier says "it's probably diseased", we pasteurize it all on principle. It's trivial to prevent edge sorting regardless of the quality of the deck, by rotating half the deck whenever you shuffle.
Phil Ivey is also involved in another lawsuit over a similar issue. In that case, he was suing the casino after they refused to pay out his winnings due to accusations of similar "cheating".

In both cases, it appears that casino staff voluntarily agreed to Ivey's requests that resulted in him obtaining an edge.

http://www.pokernews.com/news/2013/09/ivey-claims-he-used-ed...

Around the same time the casino say this happened, Crockfords Casino in London were withholding winnings from Ivey, claiming he used the same method, edge sorting, to win around $10M playing a variant of Baccarat. Last year, he admitted to noticing a flaw in the cards and exploiting it, but asserted it wasn't cheating and the Casino should have noticed it.
You know what, I agree with him. Considering nearly everything at a casino is set such that your average person will consistently lose, I've got no problems with someone finding a flaw in their cards (which, considering how seriously casinos take that sort of thing, they should have caught) and taking advantage of it like Ivey allegedly has. The law shouldn't be "Casinos win even when they fuck up", in my opinion.
What if there happened to be a flaw which resulted in people losing?

You act as if gambling is rigged, throw some dice a few hundred times then blame the dice for cheating you.

He's not saying dice or other activities like that are rigged, he's saying the odds in casinos are manufactured such that the house wins most of the time.
I always wondered how one of the best professional poker players in the world would be so big degen that he would routinely throw away hundreds of thousands in card games where he could not win.

This and the Crockfords Casino incident make his behavior more understandable. It seems that he did not really cheat, , he just exploited flaws.

To be fair, Ivey is supposedly a total degen outside of Poker, plays craps, makes prop bets, bets on sports etc. There's stories floating around the web of him betting on coin tosses, for example.

It wouldn't surprise me if he was simply playing Baccarat genuinely, noticed the possibility for edge sorting, and went for it, then looked for other casinos that had the same problem.

A friend of his has claimed privately that he takes advantage of specific lossback deals that certain casinos give certain high rollers, and this gives him a positive expectation at craps at least some of the time.

However, it's hard to know how much truth there is to that.

This is likely true considering how low the house edge is on both Baccarat (1.06% on the banker) and basic craps (don't) pass/come with full 3-4-5 odds (around 0.37%) [1]

Any small positive edge in lossback, card or dice placement will lead to advantage. Some of them can't do math as well as others, apparently. This is how Don Johnson (not the actor) broke a few casinos several years back, including - surprise! - Borgata. [2]

[1] http://wizardofodds.com/gambling/house-edge/ [2] http://m.theatlantic.com/magazine/archive/2012/04/the-man-wh...

Most of the best poker players are degenerates. I used to see many of them (and definitely Ivey) playing craps outside of the poker room non stop.

Degenerates come in all IQ ranges. They just crave action. Even the smartest ones will take bad action when they can't find good, and at poker there isn't always a game with stakes a really high roller would find interesting, but there is always a craps table.

Phill Ivey would be one of the first people to tell you that he's a degenerate gambler. I'll have to look for it, but I watched an interview where he talked about his days before he made it big. He would cash his McDonald's paycheck, go lose it playing poker, and then end up spending a few weeks sleeping on the streets.

Also, I remember one time a WSOP bracelet showed up on ebay. Apparently, its owner had made about $10 million in career earnings in poker, but he was so broke from betting on horses that he was selling his beloved bracelet for gambling money.

I doubt they can prove anything beyond reasonable doubt. If Ivey did the maths correctly, and I doubt he hasn't, he can keep claiming he had a few lucky streaks and knows when to quit. Reasonable doubt.
From the article it looks like he admits it?
Reasonable doubt is the standard for burden of proof in criminal cases, not in civil cases.
The problem is not in edge sorting or taking advantage of it..its the accusation that Ivey conspired with a dealer to get signaled of specific cards during the deal.

That very much is somewhat Illegal whether the claim of Ivey's that he requested automatic shuffling cards is correct or not...at least in the USA..probably UK as well.

The word 'conspired' makes it sound like a secret arrangement. If I understand the reports accurately, his requests were made openly to casino personnel, with no consideration offered to the individual employees. He was tempting the casino bank itself with, "I'll be a happy high-roller who keeps playing if you indulge me".

So it starts to look like: the casino, experts in the game with a large staff that had both the duty and capability to monitor the situation, chose to offer a game with a positive expectation for Ivey.