Superstar poker player Phil Ivey likes to take huge chances for massive amounts of money. Poker fans know well his willingness to put millions of dollars into a pot. And he isn’t shy about playing mini-baccarat for stunning limits, as he famously (or infamously) did very profitably in 2011 and 2012 at casinos in Atlantic City and London, with the help of an advantage play known as “edge sorting.”
So last week’s filing by Borgata to the U.S. Third Circuit Court of Appeals for a mere $250,000 constitutes a “low-stakes game” in Ivey’s world.
But it also further underscores how dug in these two sides have become since Borgata originally sued in 2014. Neither is interested in folding, nor in leaving any money on the table.
The latest filing stems from a November 2016 U.S. District Court ruling that found that Ivey’s actions constituted a breach of contract. That entitled Borgata to a refund on the $10.1M that Ivey and his baccarat partner, Cheng Yin Sun, won in four separate visits to Borgata before their similar previous activities at London’s Crockfords casino were discovered.
Borgata also had sued Ivey on fraud and RICO (Racketeer Influence and Corrupt Organizations) charges, but the judge found in favor of Ivey’s side on that front. That included denying Borgata a refund on a quarter-million dollars worth of comps (it’s good to be a “whale”) presented to Ivey during those visits. But now the casino is coming after that $250k separately.
Why Borgata lost this part of the case
“The very nature of ‘comps’ is that there is no expectation the recipient must return those goods or services if the casino does not obtain some or all of its anticipated benefits,” U.S. District Court Judge Noel Hillman wrote in the 2016 ruling. “Borgata’s comps to Ivey and Sun were provided for many reasons, including to entice a celebrity gambler to its casino to attract more patrons, and to endeavor to win presumably large sums from a high roller.
“Because the comps were not tied to an obligation that Ivey win or lose, or do anything in particular except to visit Borgata, Borgata is not entitled to the return of the value of those comps as part of its breach of contract damages.”
At this point you might be thinking, “Wait, not only does Borgata seem to have a weak case here — at least anecdotally — but why is the casino so interested in this relatively modest sum?”
Well, having read thousands of pages of filings on this case in the last five years, it strikes me that this is how both sides roll. In most legal battles, one side has an incentive — such as not wanting to go broke — to settle. That isn’t the case here.
Casino to Ivey: Where is your $10M?
As one other example of the dug-in nature of the two sides, let’s explore a recent case of push and pull.
For months, Borgata has been trying to force Ivey to put up a $10M bond pending the final outcome of the case, but Ivey has yet to post it, in spite of losing on various efforts.
Back in May, Borgata sought “information regarding [Ivey and Sun’s] assets.” Ivey declined, saying judgment was not final.
The recent filing notes that Borgata “reminded Defendants” on September 20 that discovery notices were due and that deposition notices had been issued. By that time, Ivey’s attorneys had successfully gotten the date for depositions pushed back to October 17. Then Ivey’s attorneys said Ivey and Sun were “unavailable” on October 17, so the new date became October 25.
Since then, Borgata’s attorneys say, there’s been radio silence.
“If Defendants want to stay execution of the judgment, they easily can do so within the rules by posting the appropriate bond,” attorney Jeremy Klausner wrote. “They did not need to resist discovery or force Plaintiff to ask for Your Honor’s intervention.”
Layman’s translation: “Time to ante up, Phil.”
This case will wind up being heard by the same Third Circuit that played such a central role in the New Jersey sports betting saga. It was that court’s upholding of a lawsuit by the NFL, NCAA, et al., that in May was voided by the U.S. Supreme Court, a ruling that opened the door for any state to offer sports betting.
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