Punitive damages sought

Nick Marchington, a young British poker professional, has been sued by two principals of a poker-staking operation who believe they are entitled to 10% of Marchington’s US$1,525,000 payday.

Marchington, 21, of Hornchurch, England, had a chance to become the youngest-ever winner of the World Series of Poker’s 2019 $10m Main Event before ultimately settling for seventh in the 8,569-player tourney.

However, his standout performance may soon be remembered most for the lawsuit filed by American David Yee and Canadian Colin Hartley. The pair are seeking $152,500 plus punitive damages.

According to the complaint filed in Nevada’s Clark County District Court on July 15, Marchington had sought backing from Yee and Hartley in late May and the two sides quickly made a deal. He then accepted funds to help fund his play in two WSOP events, but later backed out of part of the deal without refunding most of the money.

Marchington, according to his defense’s response, cancelled the backing for both events in late June, thus nullifying the initial agreement. Texts exchanged between the parties, submitted as case evidence, affirm that cancellation.

However, Marchington was cash-poor in Las Vegas and asked to be allowed to return home to England to refund the money several days later via PokerStars. This was the same method used by Yee and Hartley to send the initial backing funds.

Marchington funded by new backers

Instead of returning to England, however, Marchington managed to obtain additional backing allowing him to play the two events. He and the C Biscuit backers appear to have reached an agreement where Marchington played in the other event, a $5,000 no-limit hold’em tourney, under the initial terms.

Confusion reigned regarding the Main Event staking, which Marchington had cancelled earlier despite not being able to issue a refund of the combined $1,200 due Yee and Hartley.

Civility lasted through the first staked event, in which Marchington made Day 2 but did not cash. Confusion reigned, though, regarding the Main Event staking, which Marchington had cancelled earlier despite not being able to issue a refund of the combined $1,200 due Yee and Hartley.

To make matters worse, Marchington also offered to allow the two men a chance to again buy in as backers, but at a much higher “markup” – 1.7 versus the original 1.2. This would have required Yee and Hartley to pony up an additional $500 to maintain the same 10% share of Marchington’s action that had been yanked away days earlier.

To no one’s surprise, the exchanges grew acrimonous, with Yee and Hartley accusing Marchington of unethical behavior. At one point Yee texted Marchington: “Just a note, once you book and people send you $ confirmed for an event, it’s not standard to disregard those already confirmed/bought pieces, even if you find a higher rate of markup. … i.e. if you were to play the [Main Event] later on, it would be unfair to those who booked action with you previously.”

Action may face uphill battle

Yee and Hartley sought legal assistance as Marchington played deep into the money in the Main Event, poker’s most famous tourney. They eventually retained the services of Chesnoff & Schonfeld, a prominent Las Vegas law firm with decades of experience in gambling matters.

As part of the civil complaint, Yee and Hartley’s counsel also notified the World Series of Poker about the claim against Marchington. They simultaneously filed for a temporary restraining order and permanent injunction seeking to freeze part of Marchington’s winnings. In response, the WSOP issued a stop-payment order on a cheque presented to Marchington for his tournament winnings.

Yee and Hartley filed for a temporary restraining order and permanent injunction seeking to freeze part of Marchington’s winnings.

Despite the seeming unethical nature of Marchington’s cancellation, however, it appears that Yee and Hartley may have difficulty proving that the original staking deal for Marchington’s Main Event was still in effect.

Instead, the lengthy text exchanges show that they acknowledged Marchington’s initial cancellation of the deal, ethics irrelevant to the legal point. The lawsuit hinges on the Nevada court accepting the fact that the delay by Marchington in providing the $1,200 refund thus kept the initial staking deal in effect.

“It is disappointing to see a backing operation argue a player does not have the right to cancel a stake before a poker tournament starts, especially after accepting the player’s refund,” said Maurice Verstandig, one of Marchington’s US-based attorneys.

“However, we look forward to pursuing this case in the courts, and have faith the court system will bring justice to Mr. Marchington.”

Poker’s hidden ‘staking’ economy

Yee and Hartley are two of the leading owner-investors in C Biscuit Stables, which bills itself as the “biggest online cash-game poker staking community on the internet,” while also offering considerable support for skilled tournament players.

Staking operations have exploded in popularity in the past 15 years, much as poker itself has expanded across the global scene. Staking and swapping action has always been a popular part of poker’s cash-driven economy. The activity allows many players to remain in action at the poker tables while providing a hedge against the high variance inherent in the game.

Businesses such as C Biscuit Stables – a reference to staked players often being referred to as “horses” – are part of a recent wave which has turned the once-unofficial (but prevalent) activity into a more formal business form.

Still, as this case illustrates, the casual nature in how staking relationships are often created can cause legal difficulties when unusual events occur, such as Marchington’s unlikely run to a $1.5 million payday.