Cake Poker was in the news again this week. As usual it was not good news. Cake Poker was trying to get out of paying a player $60,000 that he won in heads up matches against a weak opponent. According to Cake Poker a player that was playing on a sportsbook had a faulty cashier system that was not deducting the money transferred to the Cake Poker Network from his sportsbook account. Cake Poker went on to lock the winning player’s account after they decided the chips were obtained fraudulently.
Over the next ten weeks a long Two Plus Two thread started by the winner of the $60,000 stayed on top of the Two Plus Two Internet Poker forum. Pokerfuse reported that Cake Poker settled with the player. It seems that the winner had to sign a non disclosure agreement to get whatever he received. Obviously he did not get the whole $60,000. He may not have even received half of that amount. If he had gotten anywhere close I think the online poker community would have already heard about it. That brings me to the next Cake Poker issue.
While researching a blog post for PAS about U.S. cashout speeds I read the entire Cake Poker cashout thread at Two Plus Two. U.S. Players are reporting that it is taking close to three months to receive their checks. In fact even non U.S. players are waiting 3-5 weeks for cashouts to ewallets such as Moneybookers. The maximum cashout for U.S. players is $3000 per check. Only one check can be pending at a time at Cake Poker. Since the checks sit as pending for 10-12 weeks before being processed a U.S. player cannot request a cashout more than once every 10-12 weeks. That means the most a Cake Poker player can cash out in a year is about $15,000 assuming that a player can only make the request an average of once every 11 or so weeks. Even if the $60,000 winner got half of his money not only did he get cheated for $30,000 he will have to wait 2 years to get all of his money unless full payment was a part of his settlement.
Players have tried to get Cake Poker to send bank wires, Western Union or find some alternative method for U.S. players but currently there is no other way for U.S. players to get their money. In addition to the $3000 check max the minimum is $500 leaving low volume U.S. players literally no way to cash out.
Cake Poker has had many issues in the last year. Last summer Cake Poker was caught using weak encryption by Poker Table Ratings. PTR also caught rogues Absolute Poker and Ultimate Bet with the same type of poor security, not exactly a group a legitimate poker room wants to be in the same category with. EwalletXpress then left the U.S. market after reportedly having funds seized by U.S. law enforcement. In late 2010 it came out that Cake Poker was not sending items requested in the Cake Poker store. Players were waiting months, some almost a year. Eventually Cake Poker removed all items from their store except tournament tickets and bonuses. Now they do not even offer those in the store as the store is now completely closed.
To end 2010 Lee Jones and Serge Ravitch left Cake Poker citing differences with the company. Then after serious financial trouble DoylesRoom left Cake Poker. Rumors were that DoylesRoom owed the network well into 7 figures but received a small bailout to pay off some of that debt. After getting at least partially stiffed by DoylesRoom UseMyWallet, Cake Poker’s leading U.S. ewallet, closed down. Cake Poker was one of the last online poker rooms that accepted UseMyWallet when it was obvious that they were bailing. There is no telling how much got deposited into Cake Poker by players looking to dump UseMyWallet funds and if they were able to receive those deposits from UseMyWallet.
Ewallets force merchants to keep a certain percent of their funds in reserve. These reserves can equal 3-6 months worth of deposits. When EwalletXpress closed down Cake Poker may have lost months of deposits. The same could be possible with UseMyWallet. Even if they recovered some of the money it is very unlikely they got paid in full by both companies. Cake Poker could not even afford to honor their $13k WSOP package tournament when there was a $7600 overlay.
I do not believe that Cake Poker has bad intentions. I believe that they have just made some very bad decisions and had some bad luck. Rumors are they bailed out DoylesRoom when they lured them from Microgaming, they have likely lost deposits from ewallets that were shut down by U.S. authorities, they let quality management walk out the door and brought some shady sportsbooks into the network. Maybe Cake Poker can continue to float and can catch up with cashouts. Considering so much of their action is micro they are probably not raking as much as other poker rooms their size which makes it an uphill battle.
At this point I must advise players to stay away from Cake Poker and any network room where Cake Poker handles payments. Intertops and Poker World are safe havens on the Cake Poker Network but most other rooms on the Cake Poker Network are probably bad bets.