Marina District Development Co. v. Ivey
93 F. Supp. 3d 327
D.N.J.2015Background
- Phil Ivey and Cheng Yin Sun played high-stakes baccarat at Borgata under five special requests (private pit, Mandarin dealer, Sun at table, one specific 8‑deck purple Gemaco shoe reused each shoe, automatic shuffler). Borgata agreed and wired front money.
- Over four visits in 2012 Ivey won about $9.626 million; Borgata wired winnings to a Mexican account. Borgata later learned of similar conduct at Crockfords and alleged an "edge sorting" scheme.
- Alleged scheme: cards had asymmetric back patterns; Sun signaled the dealer to orient certain high‑value cards ("turning" them) so their edge could be distinguished after they were reused and shuffled by machine, giving Ivey “first‑card knowledge” and a large statistical edge.
- Borgata sued Ivey and Sun (and Gemaco) for breach of contract, fraud, conspiracy, RICO, and related claims. Ivey and Sun moved to dismiss on multiple grounds (no private right under Casino Control Act (CCA), six‑month limitations for illegal‑game recovery, failure to plead predicate acts for RICO/fraud).
- The court denied dismissal of fraud, conspiracy, RICO, and related claims (survived pleading standards), but found the breach‑of‑contract/related claims implicated interpretation of the CCA and directed Borgata to show cause why those claims should not be administratively terminated and referred to the Casino Control Commission (CCC)/Division of Gaming Enforcement (DGE) for initial consideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Whether Borgata may sue patrons for breach of a promise to follow CCA rules | Borgata: contract with patrons included promise to follow CCA; Ivey/Sun breached by cheating, causing $9.626M loss | Ivey/Sun: Borgata provided and controlled the gaming implements; no wrongful act—mere observation and lawful requests; CCA precludes such suits or controls outcome | Court: Breach claims depend on interpreting the CCA; CCA issues should be first addressed by CCC/DGE — court ordered show cause to administratively terminate/refer these claims pending agency input |
| 2) Whether Borgata pleads common‑law fraud/conspiracy | Borgata: Ivey/Sun misrepresented superstition to obtain accommodations and turned cards to effect edge‑sorting; Borgata reasonably relied and suffered damages | Ivey/Sun: no fraudulent act; lawful observation/requests; Borgata consented and had control | Court: Fraud and conspiracy claims pleaded with sufficient particularity under Rules 8/9 and Twombly/Iqbal; claims survive dismissal |
| 3) Whether RICO claims (federal and NJ) are adequately pled | Borgata: pattern of racketeering (fraud, wire transfers), enterprise, and injury alleged | Ivey/Sun: no predicate acts; no pattern; claims fail | Court: RICO allegations (predicate fraud, wire transfers) sufficiently pleaded at this stage; RICO claims survive dismissal |
| 4) Whether Borgata’s claims are time‑barred under the six‑month statute for illegal gambling recovery | Ivey/Sun: if game was illegal, Borgata had six months to sue and did not comply | Borgata: it alleges illegality of purpose (fraud), not merely an illegal game; six‑month rule inapplicable | Court: Did not dismiss on this ground; statute argued but not applied to dispose of fraud/RICO claims; breach claims referred to agency where related CCA timing issues would be considered |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (application of Twombly to all civil actions)
- Evancho v. Fisher, 423 F.3d 347 (3d Cir. pleading and 12(b)(6) standard)
- Campione v. Adamar of N.J., 155 N.J. 245 (1998) (interpretation of Casino Control Act should be addressed first by CCC/DGE)