Cheating the Deal (spoilers)
The line a the end of the movie that no cheating took place cannot be strictly true. The idea that they merely bluffed the other players all in the spirit of the game is just a con-artist's rationalization.
As to how the deck is set up, I think its pretty clear. Meredith's dealing skills are intentionally under-represented. The way he shuffles and deals is childish or, as the other players comment, like a grandmother. There is no sign of the skill he shows at the end of the film. Regardless of his skill, it would be impossible to set up a whole deck to deal several big hands with the other players watching. The clue is that Meredith asks for a new deck before the deal. After shuffling this new deck for a while, he must have swapped it out for a deck that was prepared beforehand. A so-called "cold-deck" because the cards have not been warmed by being held and dealt. It's not clear how he nullifies the cut, but the deck is set up exactly how he wants it before he begins to deal. A more modern style of directing would have a flashback revealing the subterfuge as the villains split the proceeds.
It would not be hard to set up hands that would call for predictable replacements. Three of a kind would almost always call for 2 replacements, four to a straight or flush or four of a kind, or two pair would call for 1, a high pair with no kicker would call for three.
Getting everyone to fold in the end saves the awkward showdown. "A flush, two full houses, four of a kind, a straight flush and a royal?!? What are the odds of that??" If I were packing heat in that situation there'd be gunplay for sure. With everyone folding I might believe that only I and Meredith had *truly* big hands.
There's a lot of things that could legitimately be nit-picked in this (excellent) movie. However, setting up the deck is this fashion is actually not that far-fetched.