A professional gambler who sued for £7.7 million has unwittingly led the Supreme Court to redefine honesty
When Phil Ivey strolled into Crockfords in August 2012, staff at the Mayfair casino were delighted. They recognised him as not just a championship poker player but also a professional gambler who was willing to play for high stakes. By the time Ivey left the card table a day later, they were no longer smiling. He and a companion had apparently won £7.7 million on punto banco baccarat, a game of pure chance.
That was not supposed to happen. Over a series of games, the house is meant to come out just over 1 per cent ahead. Crockfords accused Ivey of cheating, refused to pay his winnings and refunded his £1 million stake.
There was never any suggestion of criminal proceedings. But Ivey sued Crockfords for breach of contract. In 2017, his claim reached the UK’s highest court — in part because, as Lady Hale admitted later in a lecture, her colleagues could not resist hearing such an entertaining case. “Being a Supreme Court justice is a serious business,” the court’s president added, “but on occasions it can also be great good fun.”
As Hale had subsequently discovered from The Times, the key figure was Ivey’s companion, a woman called Cheung Yin Sun. To get her own back on a Los Angeles casino that she thought had treated her badly, Cheung taught herself an extraordinary skill.
Many playing cards used in gaming have a pattern printed on the reverse. To most people, it appears symmetrical: the back of every card looks the same. But, because of the way the cards are manufactured, the pattern may be printed marginally off-centre.
In the game of punto banco, six or eight packs of cards are stored in a long shoe. The first four cards are dispensed by a croupier, two to the position marked “player” (punto) and two to the “banker” (banco) position. Gamblers bet on which position will score closer to nine points.
But the chances are not entirely random: if the first card dealt to punto is a seven, eight or nine, that position is more likely to win. If not, banco’s position has a better chance. What Cheung managed to do was to persuade the croupier to rotate all the sevens, eights and nines through 180 degrees in comparison to the other cards, after they were first played.
The croupier had no idea why she was being asked to do this but casinos are notoriously willing to accommodate punters’ whims and superstitions. When the same cards were reloaded into the shoe, Cheung could study the edge of the leading card before it was dealt and tell whether it was a high scorer.
That was when she and Ivey started winning. They carried on until a manager replaced the cards.
At first, Crockfords couldn’t work out how it was done. Then its head of compliance remembered a trick played on him as a five-year-old: his grandfather could always identify the card picked by the child because he had put it back in the pack with the thicker border on the other side.
Ivey gave frank and truthful evidence. The judge accepted that he was genuinely convinced he had not been cheating. But that is what it was. In the Supreme Court, Lord Hughes called it a “carefully planned and executed sting”. Ivey “took positive steps to fix the deck”.
Did that make it dishonest? In 1982, the Court of Appeal heard an appeal by Deb Baran Ghosh, a surgeon convicted of claiming fees by deception. His appeal was dismissed but senior judges tried to clarify the law by laying down a two-part test. Juries should consider first whether the alleged conduct was dishonest by the ordinary standards of reasonable and honest people. Then they should consider whether the defendant must have realised that those people would regard it as dishonest. Unless jurors could answer “yes” to both questions, the defendant would be acquitted.
The second part of that test ran into the law of unintended consequences: the more warped the defendant’s standards of honesty, the less likely a conviction. Dismissing Ivey’s appeal, Hughes said the subjective part of the test did not correctly represent the law: juries should in future apply the standards of ordinary decent people in deciding whether a defendant’s conduct was honest.
The criminal courts immediately started using this objective test. But, strictly speaking, Hughes’s remarks were obiter dicta — comments made “by the way” that were not necessary to his decision and therefore not considered binding.
His test was challenged earlier this year by David Barton, 64, who ran a luxury care home in Southport and was sentenced to 21 years (reduced on appeal to 17) for defrauding elderly residents of more than £4 million.
At the end of April, five judges in the Court of Appeal said the trial judge had been right to follow the test set by Hughes in the Supreme Court.
Litigants always risk having their names appropriated by lawyers as shorthand for the principles their cases establish. In that sense — and that sense alone — Ivey is now the leading authority on dishonesty.
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