Phil Ivey's edge sorting hack is phenomenal. That the casino thinks they should be insulated from smart players is unfortunate but it is their prerogative to refuse play. However, it absolutely should NOT be possible to claw back winnings from players who were NOT cheating, only playing smartly.
But they asked and he said that he was just superstitious, it was for luck. At that point he was being disingenuous.
Was it legal? Probably, I'm not a lawyer. Was it ethical? I'm leaning towards no.
Intentions are subjective, actions are not.
GOOD Gamblers are in the business of taking money.
Casinos exploit ignorance, they are able to take money EVEN THOUGH people know they don't have an edge.
GOOD Gamblers counter exploit that same edge.
The Casino lost.
So - the slight difference there, and I'm curious whether people see this as a difference without a distinction, but Phil Ivey requested the casino to set up a scenario that would allow him to "hack" and then lied about the reasoning for doing so.
He claimed that he was "superstitious" and that's why he wanted the exact cards and shuffling machine that would allow him to win.
It's not as though he happened on this by accident and simply allowed the casino to continue making a mistake, he arranged the scenario and misrepresented his intentions in doing so.
Personally, I think if you have to lie in order to take advantage of a vendor error, your moral highground starts to crumble beneath your feet.