Borgata Counters Phil Ivey Motion to Dismiss Edge Sorting Lawsuit

Attorneys for Marina District Development Company, LLC, the parent company of Atlantic City’s Hotel Casino & Spa, have filed a countering brief in response to a motion to dismiss the casino’s $9.8 million lawsuit against poker pro Phil Ivey and others over a practice called “edge sorting” employed by Ivey and a female companion at a Borgata mini-baccarat table over a series of four visits by Ivey.

The Borgata’s latest filing in the case occurred on Monday, some three weeks after attorneys from the law firm of Jacobs & Barbone P.A., representing Ivey, filed the motion to dismiss.  The original lawsuit was filed by the Borgata in April, and alleged unfair play by Ivey and his companion, in violation of, among other things, New Jersey’s casino-gaming regulations.  The Borgata lawsuit also named the manufacturer of the cards, Gemaco, Inc., and an unnamed Gemaco quality-control supervisor as co-defendants.

phil-iveyThe latest filing by Jeremy Klausner of New Jersey firm Agostino & Associates, P.C., obtained by 4Flush, finds the casino arguing against various assertions made by Ivey’s attorneys, among them the possibility that applicable statutes of limitations regarding the alleged “cheating” by Ivey had already expired.  

Ivey’s attorneys had also introduced documentation from related cases between casino patrons and New Jersey casinos, but the Borgata’s attorneys decried them as irrelevant, since they were cases of customers seeking redress from a casino, rather than a casino seeking recovery from an allegedly cheating player.

One key statement from the Ivey motion to dismiss, made this assertion: “There simply is no private cause of action by player or casino to revoke and require restitution of gambling winnings or losses because of some perceived ‘illegality’ which springs from nothing more than a player’s subjective intent or use of his five senses.”

This week’s response on behalf of the Borgata attacked that assertion, stating the following:

Although [Defendants’] motion cleverly attempts to apply existing case law to the facts in this case, Defendants’ cannot escape the fact that it is only casinos, and not casino patrons, that are regulated by New Jersey’s Casino Control Act. While certain claims by patrons against casinos may be preempted by the Casino Control Act, there is no preemption in reverse. New Jersey’s Division of Gaming Enforcement simply does not have the power to order casino patrons to take any act, including making restitution to casinos for fraud, cheating, or breach of contract. Indeed, the only way for Borgata to seek redress against Ivey and Sun [Ivey’s co-defendant, Cheng Yin Sun] is through legal action.

Later, the Borgata’s counter-filing referenced another recent New Jersey case that drew some attention in poker-news circles.  In a case also involving mini-baccarat but occurring over disputed action at the nearby Golden Nugget Atlantic City, the New Jersey courts held that the Golden Nugget AC could indeed recover ill-gotten winnings from players.  (In that case, a small group of players identified recurring patterns within decks of cards that had been improperly pre-shuffled by the manufacturer.)

As Klausner noted, the New Jersey Division of Gaming Enforcement is set up to regulate the casinos and games, not the visiting patrons.  According to the latest filing on behalf of the Borgata, “Players are not licensed or intensively regulated and subject to the invasive investigation and supervision conducted by the DGE or CCC. The CCA does not regulate casino patrons, and the DGE has no jurisdiction or power to force a casino patron to pay civil damages to a casino.”

The Borgata’s response also attacked a claim made by defendants’ attorneys that the lawsuit was an attempt to enforce the criminal statutes of the New Jersey Casino Control Act [CCA].  Instead, declared the Borgata attorney, the original lawsuit was designed to show that while Ivey and Sun “may have violated the CCA’s criminal statues,” the intent was to show “the specific acts of fraud engaged in by Defendants and how they breached their agreement with Borgata.”

That distinction, according to the Borgata, is the difference between their own civil action against the case’s defendants as opposed to any criminal action — whether considered or not — by the state.  There has always been, apart from the lawsuit itself, the possibility that the Borgata forwarded information about the Ivey visits to state authorities and that the state declined to prosecute.

In any event, according to Klausner, this civil case requires a far lower threshold for evidence: “The ‘beyond a reasonable doubt’ standard of proof in a criminal case,” the latest filing states, “is far different that the ‘preponderance of evidence’ standard here.”

However, Klausner restated their assertion that Ivey and Sun could be criminally charged.  The casino’s amended complaint against the pair includes civil RICO (racketeering claims), which the early motion to dismiss declared were invalid, but which the latest filing clarifies and reasserts.

Wrote Klausner:

Borgata specifically alleges acts involving gambling that are chargeable under state law and carry a prison sentence of more than one year. Pursuant to N.J.S.A. 5:12-113, it is a crime to “knowingly by…fraud or fraudulent scheme…or device…win or attempt[] to win money…in connection to casino gaming.” Where the amount involved is over $75,000, it is a crime of the second degree, which carries a potential prison sentence of 5-10 years. Pursuant to N.J.S.A. 5:12-114, it is unlawful to use any cheating device with intent to cheat or defraud. This is a crime of the fourth degree, which carries a potential prison sentence of up to eighteen months. See N.J.S.A. 2C:43-6(a). Borgata’s Amended Complaint sets forth in detail the acts committed as part of Defendants’ fraud and fraudulent scheme as well as their use of cheating devices. If accepted as true, these acts involve gambling, are indictable under New Jersey law, and are punishable by imprisonment of more than one year.

It’s clear that significant developments in the case will occur in the coming months.  Hearings have yet tobe scheduled in the case.


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