Ivey v Genting Casinos (UK) Ltd t/a Crockfords

Cheating at gambling is assessed objectively in the context of the particular game. It normally involves a deliberate act designed to gain an advantage which is objectively improper, having regard to the game’s nature, parameters and formal or informal rules. Dishonesty is not a separate legal element of cheating. A betting contract contains an implied term that neither party will cheat, and breach prevents recovery of the resulting winnings.

Where dishonesty is in issue, the fact-finder first determines the person’s actual knowledge or belief about the facts. It then applies the objective standards of ordinary decent people. The person need not appreciate that those standards characterise the conduct as dishonest.

Ivey v Genting Casinos (UK) Ltd t/a Crockfords concerned a professional gambler’s claim for approximately £7.7 million won at Punto Banco Baccarat. He used edge-sorting, arranging for an unwitting croupier to rotate high-value cards and preserve their orientation for later shoes. This enabled him to identify whether the next card was likely to favour player or banker.

Mitting J held that the conduct was cheating and breached the implied term of the betting contract. The Court of Appeal, by a majority, dismissed the appeal in [2016] EWCA Civ 1093. Sharp LJ dissented because she considered dishonesty, including the second limb of the test in R v Ghosh [1982] QB 1053, essential.

The Supreme Court considered the meaning of cheating at gambling, whether dishonesty was an essential element, and the correct test for dishonesty if that issue arose.

1. Appeal dismissed unanimously. The betting contract contained an implied term that neither party would cheat. The appellant’s breach of that term prevented him from recovering the claimed winnings (paras 35–36, 50 and 76).

2. Cheating has the same meaning under the contractual term and section 42 of the Gambling Act 2005. Section 42(3) is explanatory rather than exhaustive. Whether conduct amounts to cheating depends on the nature, parameters and formal or informal rules of the particular game. Cheating normally involves a deliberate act designed to gain an advantage which is objectively improper in that context (paras 38 and 45–48).

3. Dishonesty is not a separate legal element of cheating at gambling. The concept of cheating carries its own inherent wrongfulness. It may involve deception or interference, but deception is neither necessary nor invariably sufficient. Adding a separate dishonesty inquiry would either add nothing or wrongly legitimise objectively improper interference with a game (paras 43–49).

4. The appellant did more than observe an accidental card asymmetry. He deliberately caused the cards to be differentially rotated through the unwitting actions of the croupier, preserved their orientation by machine shuffling and reused the sorted shoe. This fixed the deck in a game whose essential feature was the random and unknowable delivery of cards. The conduct was inevitably cheating, regardless of its skill or the appellant’s sincere belief that it was legitimate advantage play (para 50).

5. Although unnecessary to decide the appeal, the court held that the second limb of R v Ghosh [1982] QB 1053 did not correctly represent the law and that directions based upon it should no longer be given. A fact-finder must first ascertain the individual’s actual knowledge or belief about the facts. The reasonableness of that belief is evidential, not an additional requirement. The fact-finder then applies the objective standards of ordinary decent people, without asking whether the individual appreciated that the conduct was dishonest. The approach in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 and Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37; [2006] 1 WLR 1476 was approved (paras 57–75).

1. United Kingdom Supreme Court: The court unanimously dismissed the appeal in Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67. It affirmed that the appellant had cheated and could not recover the winnings.
2. Court of Appeal: By a majority, the court dismissed the gambler’s appeal in [2016] EWCA Civ 1093. Arden and Tomlinson LJJ upheld the finding of cheating. Sharp LJ would have allowed the appeal.
3. High Court: Mitting J held that edge-sorting was cheating and breached the implied contractual term against cheating. He therefore did not decide whether the conduct also constituted the offence under section 42 of the Gambling Act 2005.