The Baccarat Machine
Cheung Yin Sun cleans out casinos around the world using acute skill and intuition
I knew there would be shoes. No woman wins tens-of-millions-of-dollars from casinos without treating herself to a few nice rides. But I was unprepared for the sheer quantity, quality and acquisitional gusto. Cheung Yin Sun, who goes by the name Kelly, has walk-in closets overflowing with heels, flats, pumps and wedges. Jimmy Choo, Christian Louboutin and Manolo Blahnik are all represented. There are enough sneakers to outfit an NBA team and loads of boots reside in the garage—right alongside her new BMW.
Then, in the midst of our leather-themed tour, she moves on to handbags, showing off limited-edition models from Louis Vuitton, Chanel and Hermès. Most striking of all is a money-green pocketbook made from reptile skin.
"It's crocodile!" Kelly enthuses. "That one was a gift from Phil."
The "Phil" she refers to is none other than poker legend Phil Ivey. He made headlines in 2012 when Crockfords Casino in London refused to cash more than $11 million in chips that he won playing baccarat. Ivey sued the refined gambling-den and Crockfords steadfastly maintained that Ivey had won by deceptive means. (Ivey and his lawyers did not respond to repeated requests for comment.) A recent appeal failed to pan out, a bid for a U.K. Supreme Court hearing is in the works and the pair remain in the hole on their profits from there. Though Ivey might be a card-playing genius, in the case of this baccarat caper all he had to do was bet. Kelly did the heavy lifting. The brains behind the operation, she brought Ivey along on a casino spree that generated more than $30 million.
The pair won their money by employing a technique known as edge sorting. It involves capitalizing on casinos that use playing cards in which the edges on either side are unevenly cut by fractions of an inch. In the game of mini-baccarat, in which players do not touch their cards, Kelly employed social engineering techniques to convince Chinese-speaking dealers to turn certain cards "for good luck." It allowed her to set the decks so that she could recognize the game's key cards: sixes, sevens, eights and nines. Winning millions becomes a foregone conclusion when you play the Kelly way.
Sitting in her high-ceilinged living room in Las Vegas, with a golf course on the gated grounds and a gorgeous pool out back, Kelly is petite and pretty and easy with a laugh. For the first time, she is welcoming a journalist into her home. Historically, she dodges reporters and dons enormous sunglasses in order to frustrate paparazzi. They snapped photos of her outside of the London courthouse where she and Ivey litigated in an attempt to get their winnings. On a warm summer afternoon, Kelly provides Cigar Aficionado with an exclusive deep-dive into her life and world.
One of the most fascinating people in casino gambling, she seems surprisingly blasé in describing what she does to drive casino personnel crazy. "I'm very happy to beat the casinos, but not excited," she says. "I feel satisfaction but not necessarily joy. This is work and I am a professional. It's what I have trained myself to do. I do not feel bad if I lose and I do not feel emotions if I win."
She has a nickname that is well earned: Baccarat Machine.
Kelly is also an automatic teller machine—one that pulls money out of casinos and puts it in her own coffers. It's a life for which she seemed to not be remotely destined. Currently 40 years old, she was born in Northern China where her father's family had made fortunes in banking. She should have indulged herself in a life of ease and wealth, but it did not work out that way after her father fell victim to China's Cultural Revolution. Mao Zedong's thugs imprisoned the wealthy and took away their belongings. Her father ranked among of them.
He was sent to a work camp during the last years of Mao's reign. "Until I turned seven [in 1983] I was very poor," Kelly tells me. "You know how I like shoes now? When I was a little girl, I had no shoes. We were so poor that my mother had to make shoes for us. She cut out pieces of cardboard from cartons and those were our shoes. My feet got very cold in winter. It was a terrible time. We had to grow our own vegetables. I lived like a country girl."
Following Mao's passing, and more capitalist-oriented leadership in China, her father was released and regained his wealth through the launching of a factory that produced wooden products. "He got rich again; he got very rich," Kelly says with a smile. "He sent me to Shanghai for school. I went to Hong Kong. I got nice clothing. I had a nice life."
She also indulged a passion for gambling. By the age of 15, Kelly was putting up money to play a Chinese version of poker. She used a fake ID to go on gambling cruises out of Hong Kong and made her way to Macau while still underage and flush with family money. "I had about $1,500 on me and won $150,000 playing baccarat," she says, admitting that the seminal experience hooked her on casino gambling. "I bought myself a nice Rolex. Later, when I went to Paris to study French and fashion design at the Sorbonne, somebody told me I had a nice watch. I said, ‘Okay. Gift to you.' I gave that person my watch."
Kelly thinks about it for a beat, maybe considering whether or not generosity provides a karmic return. "Now my favorite watch is Hublot. I have a lot of watches."
Though her father was not particularly interested in gambling, he willingly funded Kelly's predilection for financial risk. She spent her 20s as a kind of high-stakes jet-setter, going to posh gambling spots around the world and blowing money like it didn't matter. She played blackjack, baccarat, slot machines, video poker, craps, even a bit of Texas hold'em. Kelly never met a casino game that she didn't like and casino bosses loved her for it.
In Monte Carlo, Las Vegas and Macau, she received the total red carpet treatment. "They would give me penthouse suites, send me bottles of Champagne, comp my dinners, pay bills at the nightclub; I got promotional chips and money for shopping," she remembers, acknowledging that her hemorrhaging millions of dollars correlated with the fancy perks. "I lost $3 million at Palms and stayed in a suite with a pool looking out on the Strip."
In 2006 she checked into Wynn Las Vegas and put $200,000 on deposit to fund her gambling. As usual, most of the bankroll was rapidly decimated. Left with just $4,000, she wandered the rows of slot machines, hoping to get lucky. Kelly was still enough of a casino denizen to rely on fortune and believed in the possibility of randomly striking it rich.
She came across a man working the slots with fleet-fingered speed. "He played the dollar machines and I thought, ‘Oh, he must be a professional,' '' she remembers, ignoring the fact that she had no idea what a professional slot machine player really was. "I went up and asked him to teach me how to play. He looked at me and said, ‘Oh, you're a very pretty girl. I'll teach you to play.' "
The man was indeed a professional gambler. He goes under the name Steven Black and makes a living by finding various, unmined edges in casinos. Formerly a successful car salesman, Black derives profits from rebates that casinos give to losing players, he's expert at advanced blackjack moves such as ace sequencing and shuffle tracking, he has impeccable vision and an uncanny memory. As put by the talented sports bettor Bill "Krackman" Krackomberger: "He's the sharpest of the sharp."
Black took Kelly under his wing. They hit casinos in California, New Orleans and Tunica. Kelly was a quick study and she recognized that this was more apprenticeship than money-making endeavor. "We won like $600,000 in Palm Springs," she remembers, citing a faulty machine mis-wired to deal blackjacks every time a player split Aces. "That day, Steven gave me $1,200. For the most part, though, he paid me $20 per hour. I was, like, ‘Okay, I'm learning.' "
Despite Black's best efforts to turn her from a sucker to a stone-cold advantage player, Kelly could not completely shed her old ways. One night in 2006, she and friends from Shanghai were gambling it up at MGM Grand in Las Vegas. A pal had dropped $500,000 and asked to borrow $100,000. Kelly didn't have the cash on her but she signed a marker for her friend. Aware that in Las Vegas, markers are the equivalent of checks and that an unpaid marker is no different from a bad check, she trusted the friend who promised to pay it back and had the means to do so. "I went to Paris for six months and she told me that she had paid it off," says Kelly. "But, on my way back to Vegas, I entered the U.S. in Philadelphia and something happened." She didn't even get the opportunity to pass through immigration. "Police came on the plane and handcuffed me. They said that I owed $93,000 on an unpaid marker."
Kelly wound up spending 21 days in downtown Las Vegas's Clark County Detention Center. It took that long before her father could fly to Vegas and pay a total of $104,000—there were additional fees—to straighten things out. "Jail was terrible," she remembers. "At 3:00 in the morning they had hounds sniffing for drugs. I thought the underwear was dirty and would not wear it. For that I was put in solitary confinement and slept on the floor. Steven came to visit me and I told him I was very hungry. I asked for $50. He said, ‘No. Don't eat. It will make you sleepy.' Instead he gave me a deck of cards and told me to work on my card counting. I practiced every day and got good. I wanted to beat MGM [because of what had happened]."
What she would eventually come up with, of course, proved way more profitable than card counting. She taught herself to edge sort and devised an ingenious technique for applying it to mini-baccarat, a game where the casino does not blink at bets of $50,000 or more. Here's how baccarat gets played: In the game of baccarat four cards get dealt onto the table, two for player and two for banker. The object is to bet on the two cards for player or the two cards for banker and hope that your pick gets closer to a total of nine than the other. Aces count as one, 10s and picture cards are zero, everything else is face value. If a total comes to 15, it counts as five; 18 counts as eight and so on.
Kelly is not the first person to leverage the move known as edge sorting—finding games that use cards, such as a type made by Gemaco—and take advantage of unmatched edges. Her breakthrough resides in her technique. After a few test runs in the fall of 2011—"Small money," she says, "we made $200,000 at Palms, $300,000 at MGM"—she put the big play into action inside the Salon Privé private gaming room at Aria. Kelly and three collaborators established themselves as losing players by dropping $100,000 playing the game straight and losing it all. The next day they came back, deposited $500,000 and asked to play "Macau style." The casino acquiesced. Four cards were dealt before Kelly and crew made their bets. They played through one shoe and lost $175,000 while having the dealer turn key cards—sixes, sevens, eights and nines—so that the short trims faced her.
On the next shoe, Kelly was able to read the cards and know when it would be advantageous to bet player or banker. The game may as well have been dealt face-up. "Every hand, I bet $40,000," recounts Kelly, adding that she and her partners emptied the chip tray of all $5,000 and $25,000 chips. They got replenished; the game got destroyed. "The pit-boss and casino manager came over to watch. Before the shoe was finished, we had won a million dollars. I said, ‘Okay. Let's go.' We cashed out, left through the front door and drove to Caesars Palace. We already had a big suite there—no regular room for me—and put $300,000 on deposit."
They repeated the play at Caesars and won $200,000. Next stop was Treasure Island for a take of $300,000. After that they flew to Connecticut and played Foxwoods. The wins were big and audacious and impossible to keep on the down-low. A posting on the Internet by a casino security specialist limned the strategy for gaming insiders. "A week later I saw Steven at Treasure Island," says Kelly. "He had read about what we did. He said he knew, 100 percent, that it had to be me."
Impressed but recognizing that Kelly had a short shelf life without the right person to do the betting, he asked, "You want to play for big money? I'll introduce you to Phil."
In January of 2012, at the Aussie Millions poker tournament, held in Melbourne, Australia, Phil Ivey won the $200,000 buy-in high-roller event and took down more than $2 million. News filtered to Black that Ivey had some $6 million on him. He was able to bet as much as $300,000 per hand at baccarat. It seemed like an opportune moment. Kelly and Black boarded a flight from Vegas to Melbourne.
The deal was that in exchange for the introduction, Black would receive 10 percent of their winnings. Additionally, he had been working on a way of controlling dice thrown in craps. He wanted to partner with Ivey on exploiting that as well. As Kelly remembers things, "Steven and Phil played craps and lost $3 million. Phil only had half his money left and was very upset. They lost the money in just an hour after Steven said he could control the dice. He came to me and said, ‘Please, play baccarat so Phil can win back the money. Otherwise I will lose a friend.' "
Operating with Ivey's bankroll, they bought in at the baccarat table and proceeded to lose another $500,000. "I didn't know those cards!" Kelly says as way of explanation. Ivey was less than understanding. "He called me a hustler and told Steven that he is unprofessional. He had only $3 million or so left. I asked Phil to give me one night to figure it out. Steven went online and printed out copies of the card-backs being used."
Overnight, Kelly studied the cards and devised a technique for reading them. The next day, she says, "In one hour we won the money back plus $3 million. The casino gave the money to Phil and asked how he knew me. Somebody from the casino told him that I was internationally famous [for doing the baccarat play]. Phil told them that I had just come into the poker room and that I wanted to play baccarat."
In short order, Ivey became a believer. Kelly, Ivey and Steven hit the road and ravaged casinos. They played Montreal, Singapore, Macau, Monte Carlo. She wore elegantly cut designer-clothing in overseas high-limit rooms, reprising the role of the globe-trotting action-lover she had once been. They established a routine. After arriving at a gambling spot, Kelly says, "We'd spend the first day relaxing, then we'd go to the nightclub, followed by two or three days playing in the casino. One day we lost $3 million. Phil was not upset then. We went back and won $5 million the next night."
Her birthday in 2012 was a raucous affair. "We went to XS at Wynn," Kelly remembers. "Phil had girls all around him. I was so drunk. I checked into a room at Wynn instead of going home. The next morning Phil called and I did not answer the phone. Steven came up and started kicking the door. He said, ‘Let's go, let's go, the private jet is waiting. We're going to Borgata [in Atlantic City] to win money.' I had no clothing or makeup or luggage. I had to buy all new stuff at Borgata. Steven and Phil did not want me eating or sleeping. They only wanted me to be playing. That's why they called me Baccarat Machine. One time we played 24 hours. Phil slept on the floor [of the high-limit room]."
Everything was going great for the group until an ill-fated London trip in August of 2012. Ivey was in town for a poker tournament and had dropped a bundle. He hoped to win it back at baccarat. Kelly flew in and they hit Crockfords, a venerable casino in the exclusive Mayfair neighborhood. In just six or so hours, over a two-day period, they managed to score the U.S. equivalent of some $11 million. Kelly says that she suggested stopping at $5 million, fearing that the casino would balk at them cashing out for an eight-figure sum. Ivey, she says, wanted to keep going. Winning so much so quickly, she says, "We got very lucky."
After their play wound down, it appeared that Kelly was being overly cautious. "Phil spoke with the casino people, then he came back and showed Steven and I the order for a wire transfer," she says, explaining that the $11 million payday from Crockfords appeared to be approved for shipping. With things on track, Ivey quickly returned to Vegas so he could deal with an unexpectedly ill family member. Three days later, the money had yet to land in Kelly's bank account. She says she called Ivey to ask where the cash was. Either the casino reneged or Ivey still had all the winnings. "He said he did not receive the money. I told him that I did not believe him. After a week, I said, ‘Phil, you don't need to give me the money. It's okay. It is only $11 million. It's fine. You keep it.' "
Soon after, Kelly was hanging out with friends in France. She made her way down to Nice with the intention of playing in a poker tournament. "I saw Phil," she remembers. "He told me not to play. Reporters were there and they knew about London. At that point I realized that Phil had been honest about the money not arriving. We wound up leaving France and flying to Atlantic City to play Borgata. Phil and I split the cost of a private jet."
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