Gambling - When does gamesmanship become cheating?

The Supreme Court today delivered their judgment in the case of Ivey v Genting Casinos (UK) Ltd t/a Crockfords dismissing Mr Ivey’s appeal on the grounds that his actions were dishonest and he had attempted to cheat the Casino.

Mr. Ivey is a professional gambler and sued Crockfords Casino in London for unpaid winnings which the casino had withheld on the basis they considered the game had been compromised.  In August 2012, Mr. Ivey had been playing a game called ‘Punto Banco’, a variant of Baccarat, and persuaded the dealer to rotate card which he deemed ‘good’ or advantageous in the deck claiming he was superstitious; over a period of 2 days his winnings totalled £7.7m.

In fact, as admitted in the case, Mr. Ivey was not superstitious and was using a technique called Edge Sorting to sway the odds of winning in his favour.  The odds in favour of the casino in this form of game are small, taken over all the play.  In Punto Banco at Crockfords it was 1.24% if the player wins and 1.06% if the banker wins.

Edge sorting is possible when the manufacturing process of playing cards 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. It is possible for a sharp-eyed person sitting close to a card shoe (the holder that dispenses the playing cards) to see which long edge it is. This information becomes useful only if things can be arranged so that the cards which the gambler is most interested in are all presented with one long edge facing the table, whilst all the less  interesting cards present the other long edge. Then the gambler knows which kind of card is next out of the shoe. Using edge sorting to identify high value cards in Punto Banco will give the player a long-term edge of about 6.5% over the house if played perfectly accurately.  By persuading the dealer to rotate certain cards Mr. Ivey gained such an advantage.

The facts of the case were not in dispute, the appeal raised questions about the meaning of the concept of cheating at gambling and the relevance of dishonesty to that concept.  Mr. Ivey claimed the practice was simply gamesmanship and a reasonable tactic, as he had not physically tampered with the card shoe he argues he could not be found to have cheated.

Dismissing the appeal the Supreme Court has also, in its judgement, changed the test for determining dishonesty not only in gambling disputes but criminal prosecutions and civil actions.   

Until this judgement the two-stage test for dishonesty was established in the case of R v Ghosh  in 1982.  The first stage requires, the jury must ask whether in its judgment the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people. If the answer is no, that disposes of the case in favour of the defendant. But if the answer is yes, it must ask, secondly, whether the defendant must have realised that ordinary honest people would so regard his behaviour as dishonest, and he is to be convicted only if the answer to that second question is yes.

The Supreme Court has stated “the second leg of the rule adopted in Ghosh has serious problems”.

The Court went onto explain the ‘problem’  the test as it had previous stood meant that the less a defendant’s standards conform to society’s expectations, the less likely they are to be held criminally responsible for their behaviour.

“The law should not excuse those who make a mistake about contemporary standards of honesty, a purpose of the criminal law is to set acceptable standards of behaviour.”

The second leg has therefore effectively been done away with.  If the Jury feels that the action were dishonest, the views of the accused is irrelevant.

The Supreme Court did also state however, that had they applied the second limb of the test to Mr. Levy, they would have reached the same conclusion and dismissed the Appeal.