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Situation:

Hero is out of position with KKxx against Villain in a local Omaha cash game. Play proceeds to river, and Villain bets to put Hero all-in. Hero suspects busted draw and calls.

Hero turns over kings, but not the other two cards. Villain shows all four cards. Dealer then mucks all 4 of Villain's cards, and the two kings. As the dealer starts pushing the pot towards Hero, then pauses. Hero throws remaining two cards, still face down, into muck over the pot being pushed to him.

Dealer then announces "you must show four cards to win," and says Villain should win the pot. Hero counters with the fact that she mucked Villain's hand first, and that means his cards were dead, and Dealer was already pushing the pot toward Hero. Furthermore, she had already mucked the two kings, signifying that the hand was over. There is no dispute over the cards and who had the better hand.

The rules, so far as I know them, say that in the event of a mucked winning hand, the highest live hand takes the pot. However, in this situation, there is no live hand, since Villain's hand was mucked before Hero's. Hero contends that, after mucking all four of Villain's cards, Hero wins by default, and this is a mistake by the dealer that shouldn't affect the outcome (dealer should have waited until all four of Hero's cards were shown before mucking the hands). Who should win the pot in this situation?

Here's the additional twist: the Villain in this situation is also the game-runner, playing in his own game (this is not an unusual situation at this game).

As it turns out, the game-runner decided to split the pot between himself and Hero, and Hero grudgingly accepts the verdict, as he expects that the game-runner is not going to voluntarily give up the whole pot to his opponent.

How would you award the pot in this situation?

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    Obviously Hero should win this pot in full. – Kenshin Jul 25 '15 at 10:21
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It seems quite plain to me that the sequence of events it crucial to resolving this situation. The fact that villains hands is mucked, and that a live hand is in play means Hero should be awarded the pot. It seems irrelevant to me that the Hero's four hole cards aren't all exposed.

It also seems disingenuous that the game runner should award himself half the pot! It's dishonest. Personally, I wouldn't be playing in that game for much longer.

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    I would not be playing in this game for even one additional hand. The "game runner" is clearly unethical. – mah Aug 6 '15 at 17:15
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Yes, this was a serious dealer mistake, and I would have reprimanded him (or her) for it.

At showdown, Villain had the only properly tabled hand. Hero’s hand is still eligible to win, but has not been shown yet. Dealer’s job was to wait for Hero to show his hand or surrender it, and should have announced clearly, “Best hand shown is <Villain’s>. Show this hand or muck it.” Instead, she mucked V’s hand prematurely which she had no right to do.

Since H’s hand was still eligible to win when V’s was mucked, he has every right to claim the pot without showing, just as V has every right to claim the pot as the only shown hand. In this case, I think I’d let the cards speak: if V’s tabled hand could not beat the pair of Kings, then I think giving H the pot is clearly the better choice. Rules should be followed, but cards should win over arbitrary enforcement of rules.

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Technically, the only showed hand at showdown was the villain's. You did not show your four cards and therefore the villain had the only hand that merits a claim to the pot at showdown. You mucked your hand without showing and when doing so you loose claim to the pot. I would rule your hand has no claim to the pot. Simple rule "table your cards face up" or you do not have a hand that has claim to the pot.

The dealer made no mistake, as far as the dealer is concerned the hand is not considered unless you table it. IE the dealer should not be reading it or announcing what you have until your whole hand is tabled. Once a hand is tabled and read, it is a winning hand rather or not the dealer mucks it until someone tables a better hand. In this case you did not table a better hand.

Having said that, I agree with Toby, the operator of your game saw enough of your hand that he knew that he could not beat what he saw. He should of just gave you the pot. I would quit playing his game, he is a bit of a sleaze ball.

In a public card room the rule is in place for good reasons. Someone loosing to you should see the whole hand your playing with and it is a basic security measure to make sure the hand your winning with is a legitimate hand not containing something like two aces of spades or a card on the board. A floor person is obligated to rule against you in this scenario.

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TL;DR

It depends. However, my opinion is to stop playing with them. Also, in this particular context, I'd favor Hero.

Full answer:

Let's start with the core principle: This is all about house rules.

Formally speaking, a player who wants to win must show its cards. Why?

  • The basic rules when you learn the game tell you so.
  • Online games proceed automagically like that.
  • Some alliances like this one are quite specific right in the 2nd item when tell:

    [...]table all cards properly when competing at showdown[...]

It all depends on the core set of rules. But this is formally, or almost. Remember that most players are (me included) casual players and do not enforce a lot of things (fully tabling the cards is one of them in my case!), so it is neither expected than the Dealer be so strict (who was, by the way, quite partial when favouring the Villain despite his (Dealer's) own mistakes when enforcing rules).

Said this, and as others said:

  • For low amounts of money in a home game, I'd never doubt the pot is Hero's.
  • For tournaments or high money home game, I'd surely award the pot to Hero but not before obliging them to fully disclose their cards. The reason behind? As said in other answers: the most important part of Hero's hand was shown and seems Hero was the last one tabling them.

This adds up to: despite their mistake of not fully tabling Hero's cards, the dealer should have done like this:

  1. Call the rule on time: Tell you to show all Hero's cards, or consider them mucked. In organized (even when non-official) tournaments this means calling floormen or alike to call you on that topic.
  2. Understand that their own (Dealer's) actions were decisive to end the hand: mucking deck cards.
  3. Since this is a home game and not an official tournament, the Dealer was not even quite aware of the rules in the appropriate time. It is unfair to unethical to expect the users are aware of such rules, and enforcing them after another -mistakefully, now by D's action- ended hand. The proper procedure should be to announce the rule for future cases so everyone is aware there.

Anyway, personally I'd never play again when they are both organizers (Villain) and Dealer. And yes, even in a tournament after Hero was called attention by dealer or floormen, the pot is Hero's.

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