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

Smart Summary

Supreme Court of the United Kingdom – Anonymised Case Digest

Factual and Procedural Background

The Plaintiff, a professional gambler, sued the Defendant, a casino, to recover approximately £7.7 million allegedly won during two days of Punto Banco Baccarat play in August 2012. The Plaintiff and an Associate employed a technique known as “edge-sorting,” persuading the croupier to rotate certain cards so that high-value cards could later be identified from their asymmetrical backs. After an internal investigation, the Defendant refused to pay, asserting that the conduct amounted to cheating.

The claim was tried before Judge [Mitting] in the High Court, who found for the Defendant on the ground that the Plaintiff had cheated and was therefore in breach of an implied term not to cheat. A majority of the Court of Appeal upheld that decision. The Supreme Court (constituted by Judge Hughes delivering the lead judgment with four Justices concurring) heard the Plaintiff’s final appeal.

Legal Issues Presented

The meaning of “cheating” in the context of gambling contracts and section 42 of the Gambling Act 2005.
The relevance, if any, of dishonesty to the concept of cheating.
The proper legal test for dishonesty should dishonesty be an essential element of cheating.

Arguments of the Parties

Plaintiff’s Arguments

The same definition of “cheating” must apply both to the implied contractual term and to the statutory offence in section 42.
Cheating necessarily involves dishonesty; therefore the R v Ghosh two-stage test must be satisfied.
Because the trial judge accepted that the Plaintiff genuinely believed his conduct was legitimate “advantage play,” the second limb of Ghosh (appreciation that ordinary people would regard the conduct as dishonest) was not proved.
Consequently, no cheating occurred and the winnings should be recoverable.

Defendant’s Arguments

The Plaintiff’s conduct constituted cheating under the implied term and/or the statutory offence, irrespective of dishonesty.
By orchestrating the rotation of cards, the Plaintiff interfered with the essential element of randomness that defines Punto Banco, thereby fundamentally compromising the game.
As the contract was breached through cheating (and potentially through criminal conduct), the Plaintiff could not enforce recovery of the alleged winnings.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
R v Ghosh [1982] QB 1053	Established a two-stage test for dishonesty (objective and subjective limbs).	Second limb expressly disapproved; Court adopts a purely objective test of dishonesty.
R v Scott [1975] AC 819	Suggested dishonesty integral to common-law cheating.	Distinguished; common-law offence not determinative of gambling “cheating.”
Welham v DPP [1961] AC 103	Defrauding focuses on effect upon victim, not solely deception.	Cited to support broader conception of wrongdoing beyond deception.
R v Feely [1973] QB 530	Honesty is for the jury applying objective standards.	Used to illustrate objective approach pre-Ghosh.
R v Williams [1953] 1 QB 660	Judicial role in defining “fraudulently.”	Contrasted with modern jury approach to dishonesty.
R v Hayes [2015] EWCA Crim 1944	Example of jury applying dishonesty to sophisticated banking practice.	Demonstrated workability of objective test.
R v Rostron [2003] EWCA Crim 2206	Objective dishonesty in non-financial context.	Same illustrative purpose as Hayes.
R v Greenstein [1975] 1 WLR 1353	Jury must apply ordinary standards to dishonesty.	Supported objective analysis.
R v Cornelius [2012] EWCA Crim 500	Highlighted divergence between civil and criminal dishonesty tests.	Noted as unsatisfactory gap later resolved by present judgment.
Twinsectra Ltd v Yardley [2002] UKHL 12	Earlier civil uncertainty over dishonesty.	Referenced in discussing evolution toward objective standard.
Royal Brunei Airlines v Tan [1995] 2 AC 378	Set objective civil test for dishonesty.	Adopted as correct test for all contexts.
Barlow Clowes Int’l v Eurotrust [2005] UKPC 37	Affirmed objective test for dishonest assistance.	Cited approvingly.
Abou-Rahmah v Abacha [2006] EWCA Civ 1492	Further civil confirmation of objective test.	Reinforced Court’s adoption.
Starglade Properties v Nash [2010] EWCA Civ 1314	Drew attention to civil/criminal inconsistency.	Used to justify need to overrule Ghosh.
R v Waterfall [1970] 1 QB 148	False representation requires knowledge/recklessness.	Part of historical review of subjective elements.
R v Royle [1971] 1 WLR 1764	Same principle as Waterfall.	Historical context.
R v Gilks [1972] 1 WLR 1341	Illustrated flaws in allowing defendant’s personal view to absolve dishonesty.	Example showing danger of Ghosh second limb.
R v McIvor [1982] 1 WLR 409	Discussed objective vs. subjective dishonesty.	Analysed in rejecting dual standards.
R v Landy [1981] 1 WLR 355	Emphasised need to prove defendants’ actual knowledge in fraud.	Explained distinction between knowledge of facts and dishonesty of conduct.
Boggeln v Williams [1978] 1 WLR 873	Applied Feely objective approach.	Part of pre-Ghosh tapestry.
R v Gladstone Williams [1987] 3 All ER 411	Two-stage test in self-defence (subjective belief + objective reasonableness).	Cited as workable analogy for dishonesty analysis.
Governor of Brixton Prison, Ex p Sjoland and Metzler [1912] 3 KB 568	Historical example of “three-card trick” where no cheating despite deception.	Illustrated that deception does not always equal cheating.

Court's Reasoning and Analysis

1. Meaning of Cheating. The Court traced statutory history from 1664 to the Gambling Act 2005 and held that “cheating” in gambling carries its own inherent wrongfulness; it is not confined to deception or dishonesty and need not result in obtaining property. The implied contractual term and section 42 share the same meaning.

2. Dishonesty Not a Necessary Element. After analysing authorities, the Court concluded that adding a separate element of dishonesty would either add nothing (if all cheating is already dishonest) or wrongly excuse certain improper conduct. Cheating is therefore judged objectively without importing the Ghosh subjectivity.

3. Overruling Ghosh. The Court identified six major problems with the second limb of the Ghosh test, including rewarding defendants with warped moral standards and creating divergence between civil and criminal law. It adopted the objective test from Royal Brunei Airlines v Tan and Barlow Clowes: (a) ascertain the defendant’s actual belief/knowledge of facts; (b) assess honesty by the standards of ordinary decent people; no requirement that the defendant recognise those standards.

4. Application to Facts. The Plaintiff orchestrated the rotation of cards to eliminate randomness, fundamentally altering the game’s nature. Whether or not he believed the tactic legitimate, objectively it interfered with the process and constituted cheating. Even if dishonesty were required, the conduct would be dishonest under the newly adopted objective test.

Holding and Implications

APPEAL DISMISSED. The Plaintiff cannot recover the £7.7 million because his conduct breached the implied term not to cheat.

Implications: The Supreme Court abolishes the second limb of the Ghosh test, creating a unified, objective standard of dishonesty across civil and criminal law. The decision clarifies that in gambling, cheating does not hinge on subjective dishonesty; any deliberate, improper interference with the game’s agreed structure suffices. This ruling will influence future criminal prosecutions, civil fraud cases, and contractual disputes involving allegations of dishonesty.

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