Marina District Development Co., LLC v. Ivey

216 F. Supp.3d 426 (2016)

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Nature of the Case

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Facts

D contacted P to arrange a visit to play high-stakes Baccarat. D made five requests: (1) a private area or 'pit' in which to play; (2) a casino dealer who spoke Mandarin Chinese; (3) a guest (defendant Sun) to sit with him at the table while he played; (4) one 8-deck shoe of purple Gemaco Borgata playing cards to be used for the entirety of each session of play; and (5) an automatic card shuffling device to be used to shuffle the cards after each shoe was dealt. Borgata agreed to Ivey's requests. In return, Ivey agreed to wire a 'front money' deposit of $1 million to Borgata, and that the maximum bet would be $50,000 per hand. The simple fact is if a player knows the value of the first card in the shoe before it is dealt, the player can reverse the house advantage, and instead have a significant advantage over the house. The player with this 'first card knowledge' has an overall advantage of approximately 6.765% over the house. The advantage is up to 21.5% for 'player' bets and up to 5.5% for 'banker' bets. D's total winnings for his four visits to P was $9,626,000. P eventually discovered that D and Sun committed what it considers to be an 'edge sorting scam.' If cards are not cut symmetrically during the manufacturing process, the two long edges of the cards will not be identical. Ds had P sort the cards by using good and bad card designations where the dealer would lay the card down a certain way on the table. When the cards were cleared and put in the used card holder, the leading edges of the strategically important cards could be distinguished from the leading edges of the other cards in the deck. Ds had 'turned' the cards with values of 6, 7, 8, and 9, so that they could be distinguished from all other cards in the deck. With an automatic card shuffler, the edges of the cards would remain facing in the same direction after they were shuffled. Hand shuffling cards would screw up their carefully organized deck and with the same cards being reused Ds were guaranteed to win. Once completed, Ds saw the leading edge of the first card in the shoe before it was dealt, giving them 'first card knowledge.' D bet below the maximum bet until the 'edge sorting' all the cards in the shoe was completed. P's claims were for breach of contract, breach of implied contract, and breach of the implied covenant of good faith and fair dealing. Both parties moved for summary judgment.