Dishonesty was not an additional legal element of cheating at gambling. The Supreme Court so held, in dismissing the appellant professional gambler’s appeal against the lower court’s decision (upheld by the Court of Appeal) that he was not entitled to receive his ‘winnings’ from the respondent casino because he had cheated. The court held that the judge’s conclusion, that the appellant’s actions had amounted to cheating, was unassailable, and that it would be very unwise to attempt a definition of cheating. Further, the court ruled that the second leg of the test propounded in R v Ghosh  2 All ER 689 did not correctly represent the law and directions based upon it ought no longer to be given.
Ivey v Genting Casinos (UK) Ltd (trading as Crockfords)  UKSC 67 Supreme Court - Lord Neuberger, Lady Hale, Lord Kerr, Lord Hughes and Lord Thomas SCJJ - 25 October 2017
Gaming – Gambling – Meaning of ‘cheating’ at gambling and relevance of dishonesty
The appeal raised questions about the meaning of the concept of ‘cheating’ at gambling and the relevance of dishonesty to that concept.
The appellant was a professional gambler. Over two days in August 2012, he used a highly specialist technique called ‘edge-sorting’ at the respondent casino (the casino) while playing a card game known as ‘Punto Banco Baccarat’, which had the effect of greatly improving his chances of winning. He had also had the help of another professional gambler, C. Over the two days, the appellant won a total of approximately £7.7m. The casino considered that what the appellant had done amounted to cheating and it declined to pay him his winnings. The appellant contended that he had not cheated, but had deployed a perfectly legitimate advantage. The High Court held that the appellant’s use of edge-sorting amounted to cheating. The Court of Appeal, Civil Division, upheld that finding. The appellant appealed.
Issues and decisions
Whether the concept of cheating at gambling included an additional legal element of dishonesty.
The casino submitted that the appellant had committed an offence, under section 42 of the Gambling Act 2005 (GA 2005), and that, consequently, he could not recover the proceeds of his alleged criminal offence (see  of the judgment for the provision). The appellant submitted that the test for cheating was the same for the implied term as for section 42 GA 2005, namely that cheating necessarily involved dishonesty. The court considered the correct test for dishonesty, if such was an essential element of cheating. In particular, it considered the second stage of the two-stage test set out in R v Ghosh  2 All ER 689, which asked whether the defendant had to have realised that ordinary honest people would regard his behaviour as being dishonest.  1 All ER 333 and Royal Brunei Airlines Sdn Bhd v Tan  3 All ER 97 were also considered, along with section 2 of the Theft Act 1968 (TA 1968).
It would be very unwise to attempt a definition of cheating. Its essentials normally involved a deliberate (and not an accidental) act designed to gain an advantage in the play which was objectively improper, given the nature, parameters and rules (formal or informal) of the game under examination. Dishonesty was not a matter of law, but a jury question of fact and standards. Except to the limited extent that section 2 of TA 1968 required otherwise, judges did not, and had to not, attempt to define it. Accordingly, dishonesty could not be regarded as a concept which would bring to the assessment of behaviour a clarity or certainty, which would be lacking if the jury were left to say whether the behaviour under examination amounted to cheating or did not.
Dishonesty was, by no means, confined to the criminal law. In civil actions, which might frequently raise the question whether an action was honest or dishonest, the law was settled on the objective test.
The second leg of the test propounded in Ghosh did not correctly represent the law and directions based upon it ought no longer to be given. There were a number of serious problems about the second leg of the rule adopted in Ghosh. The principal objection was that the less the defendant’s standards conformed to what society in general expected, the less likely he was to be held criminally responsible for his behaviour. There was no reason why the law should excuse those who made a mistake about what contemporary standards of honesty were. On the contrary, it was an important, even crucial, function of the criminal law to determine what was criminal and what was not; its purpose was to set the standards of behaviour which were acceptable. The test of dishonesty was as set out by Lord Nicholls in Royal Brunei Airlines and by Lord Hoffmann in Barlow Clowes. When dishonesty was in question, the fact-finding tribunal had to first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief was a matter of evidence (often in practice determinative) going to whether he had held the belief, but it was not an additional requirement that his belief had to be reasonable. The question was whether it had been genuinely held. When once his actual state of mind as to knowledge or belief as to facts was established, the question whether his conduct had been honest or dishonest was to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There was no requirement that the defendant had to appreciate that what he had done was, by those standards, dishonest (see , , -, ,  of the judgment).
In the present case, the judge’s conclusion that the appellant’s actions had amounted to cheating was unassailable. It was an essential element of Punto Banco that the game was one of pure chance, with cards delivered entirely at random and unknowable by the punters or the house. What the appellant had done had been to a carefully planned and executed sting. It might be that it would not be cheating if a player had spotted that some cards had a detectably different back from others, and had taken advantage of that observation. However, the appellant had done much more than observe; he had taken positive steps to fix the deck. That, in a game which depended on random delivery of unknown cards, was inevitably cheating. The issue of whether what had been done amounted to cheating, given the nature and rules of the game concerned, had been a jury question. The judge had applied himself to the question of whether there had been cheating in exactly that jury manner. He had directed himself that it was ultimately for the court to decide whether the conduct amounted to cheating and that the standard was objective. In so directing himself he had been right. In any event, the facts which the judge had found amounted to a deception of the croupier. Accordingly, if, contrary to the conclusions arrived at, there were, in cheating at gambling, an additional legal element of dishonesty, it would have been satisfied by the application of the test set out above (see , , ,  of the judgment).
Royal Brunei Airlines Sdn Bhd v Tan  3 All ER 97 approved; R v Ghosh  2 All ER 689 overruled; R v Governor of Brixton Prison, ex p Sjoland and Metzler  3 KB 568 considered; R v Williams  1 All ER 1068 considered; R v Gilks  3 All ER 280 considered; R v Feely  1 All ER 341 considered; Twinsectra Ltd v Yardley  2 All ER 377 considered; R v Rostron  All ER (D) 269 (Jul) considered; Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd  1 All ER 333 considered; Starglade Properties Ltd v Nash  All ER (D) 221 (Nov) considered; R v Cornelius  All ER (D) 122 (Mar) applied; R v Hayes  EWCA Crim 1944 considered.
Decision of the Court of Appeal, Civil Division,  EWCA Civ 1093 affirmed.
Richard Spearman QC and Max Mallin QC (instructed by Archerfield Partners LLP) for the appellant.
Christopher Pymont QC and Siward Atkins (instructed by Kingsley Napley LLP) for the casino.
Carla Dougan-Bacchus, Barrister.