The judge's decision drew an angry reaction from casino officials, who called it "an ambush" and vowed to file an appeal first thing Tuesday morning.
But Tilman Fertitta, the Texas billionaire who owns the Golden Nugget, said he decided to pay the winners to make the whole thing go away.
"Without question, the mini-baccarat game that took place on April 30, 2012, allowed $10 bettors to realize a gambler's dream and enabled them to beat the house out of $1.5 million," he said. "Even though we can appeal the court's ruling and take full advantage of the appellate process and legal system, and tie the matter up in litigation for a number of years, the Golden Nugget is a people business, and is prepared to allow the gamblers - most of whom continue to gamble at Golden Nugget - to realize the gambler's dream of beating the house."
The casino also will let gamblers keep more than a half-million dollars it already paid them from the same disputed games.
"I wasn't cheating," one of the gamblers, 51-year-old Michael Cho of Ellicott City, Md., said after the judge's ruling. "I didn't do anything illegal. It wasn't right for them to get the money."
The dispute stems from numerous games of mini-baccarat held at the casino earlier this year. Unbeknownst to either the players or the casino, the cards put into use for the games were not shuffled as their manufacturer, Gemaco Inc. of Kansas City, Mo., had promised.
Over a speakerphone in the judge's chambers, the company's attorney, Jeffrey Mazzola, acknowledged the company had erred.
"There was a mistake made at the Gemaco facility, which we freely admitted," he told the judge. "This was a one-time, isolated mistake, but it occurred. It's supposed to be a game of chance. It changed from a game of chance to a windfall for the individual players. What we have now is individual players coming to the court asking for a free payday based on a mistake that took place."
Lawyers for the Golden Nugget said the pattern of cards became apparent to players, who had been wagering $10 a hand and suddenly upped their bets to $5,000 a hand. The cards did not come out of the chute in numerical order, such as 2-3-4-5. Rather, they came out in a predetermined pattern that the manufacturer lists as a proprietary secret, the attorneys said.
But it did become obvious to the players.
"Anybody could see that - that was the dream we all look for," Cho said.
But Cho said he and the other gamblers still faced risk because they had no idea how long the pattern would endure. It lasted at least 41 hands, during which the players won more than $1.5 million. Despite its suspicion that a sophisticated cheating operation was under way, the casino did not stop the games.
"We took a chance on every hand we bet, that it wouldn't change," he said. "We didn't know if it was going to change. That's called gambling."
The Golden Nugget had sought a ruling barring the gamblers from cashing in more than $977,000 worth of chips they won from the game but still have in their possession. The casino also wanted the judge to order the return of more than $500,000 in winnings it paid out to some of the winners immediately after the games.
The judge denied both requests, saying there will be time to address those issues as the lawsuits filed by both sides come to trial. He agreed that the gamblers did nothing wrong, and even though they discerned a pattern, the judge said there was no guarantee it would not change at any moment. Fertitta said the payments to the gamblers would occur on the condition that both sides dropped litigation against the other.
"It was a rigged game," casino attorney Louis Barbone said. "We walked in that day believing everything was on the up-and-up. We walked out $1.5 million in the hole."
The casino claims the vendor's failure to shuffle the cards made them "defective" and in violation of state gambling regulations mandating fair odds for both the casino and its customers.
Fertitta said the proper course for Golden Nugget to recoup its losses was through litigation with the card manufacturer.
"We have a company we can go back against that has admitted fault," he said. "But that's our problem."