The casino didn’t know its own cards. Racing knows exactly what it’s handing out.
Phil Ivey won $9.6 million playing baccarat at the Borgata in Atlantic City. The casino paid him, then sued to get it back. At Crockfords in London he won another £7.7 million. That one they never paid at all.
The method is called edge sorting, and it is brilliant. Ivey asked for a specific brand of cards, a Cantonese-speaking dealer, and the same decks reused shoe after shoe. His playing partner, Cheung Yin Sun, asked the dealer to turn certain cards around, selling it as a matter of luck. The cards had tiny asymmetries printed along their backs. Once the high cards faced one way and the rest faced the other, those flaws told them what was coming out of the shoe. Ivey never marked a card. He never touched the deck. The dealer did everything, and the house approved every request.
And I still side with the casinos.
Not because Ivey didn’t have an edge. He did. Spotting a printing flaw on the back of a card from across a baccarat table is a real skill, the kind most people in that building wouldn’t notice in a lifetime. The edge was real. How he put it to work is the problem. The casino said yes to a superstitious high roller. It never knowingly said yes to sorting its own deck. In 2017 the UK Supreme Court ruled that crossed the line into cheating. In New Jersey, a federal court found Ivey breached his contract with the Borgata and ordered roughly $10 million returned. The two sides settled in 2020.
Think about the card counter. He watches what every player at the table can see and does the math faster and better. Nobody is induced to do anything. Casinos hate him, back him off, and show him the door, but he isn’t cheating. Ivey didn’t just read the game better than the house. He got the house to change the conditions of the game in his favor under a false pretense. That’s the line. Skill on one side, steering on the other.
Now here’s where I part ways with the casino crowd. The house set the procedures. Its dealers work under stringent rules the house writes. It bought cards with a manufacturing flaw, and it let a known high-stakes player dictate how its game would be dealt because it expected to win. Negligence doesn’t make deception legal, but it doesn’t make the house blameless either. If you’re going to take someone’s money, you’d better know your own game.
Which brings me to us.
Because in horse racing, nobody has to invent a superstition. The house hands out the edge on purpose, by contract, and the rest of the pool pays for it.
I’ve been writing about computer assisted wagering for a long time, and I’ve tried to be fair about it. When I looked at the impact of CAW on horse racing, I said plainly that these players may be keeping the sport’s numbers alive. I sat down with a CAW player for Horseracing’s True Lifeline so people could form opinions on facts instead of assumptions. I’m not anti-edge. I’ve made my living finding one. A team that builds a better model is doing the same thing Ivey did when he spotted those card backs. That’s the legitimate half of his edge, and it deserves respect.
The problem is the other half. The conditions.
As I laid out in Keeneland’s CAW Fix: A Magic Trick With No Rabbit, CAW players in many cases receive double-digit rebates, which lets them operate around break-even on results and still profit on volume. They get the infrastructure to fire money into the pools in the final seconds. They get tote and data access the $20 player at the simulcast window or on his phone never sees. And the regular player watches the odds on his horse keep moving after the field leaves the gate.
Ivey had to talk a dealer into rotating cards. CAW teams just sign a deal. Same result. The house changes the game for one player, and everyone else at the table pays for it. The difference is that the Borgata didn’t know what it was agreeing to. Racing does.
And before anyone tells me the sport can’t survive without those conditions, look at New York. NYRA finally drew a line, cutting CAW off at one minute to post in nearly all pools and throttling that final minute to retail speed. This summer at Saratoga, NYRA reported CAW play down about 29 percent and retail wagering up 6.8 percent, and the meet still set a handle record at $905.4 million. I’ve raised real questions about exactly what’s being counted, but the sky didn’t fall. The house changed the conditions, and the game held up.
What bothers me most is that the rules only ever seem to run one way. A slot machine malfunctions and the casino voids the jackpot. A sharp sports bettor wins and gets limited to pocket change. A horseplayer who outhandicaps the room gets nothing extra, while the high-volume player gets paid to bet. When the house makes a mistake, the player eats it. When the player finds an edge, the house takes it back. And when the house wants to hand an edge to someone, it calls it a business arrangement.
There’s a famous bit of wisdom from Rounders: if you can’t spot the sucker in your first half hour at the table, you are the sucker. Every horseplayer betting into a pari-mutuel pool should ask himself who the sucker is at this table.
Phil Ivey was found to be cheating because the house unknowingly gave him an edge.
So what do we call it when the house does it knowingly?
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