While not legally bankrupt Cereus is bankrupt in the widely accepted definition. Their liabilities far outweigh their ability to service their debt. It has been reported that Cereus owes players about $54 million but has less than $6 million in liquid assets. I believe the source of that article. It is ElevenGrover on Two Plus Two, someone with an inside scoop at Cereus. This news should come as no surprise to anyone following the situation.
After Black Friday Cereus canceled all pending cashouts. U.S. players have not been allowed to cash out since. Non U.S. players were able to cash out a max of $250. Later this max was raised to $500 and $1000 for certain methods. Non U.S. players can request a cashout one week after receiving their previous cashout. This means that most players can only request one or two cashouts a month.
While hundreds of thousands of dollars have been paid to players that is barely a dent in the overall liability owed to players. Cereus is upside down $48 million. If Cereus were a legitimate business they would have already sought bankruptcy protection and ceased operations. Instead they seem to hope that they can continue to float their business while drawing salaries out of what little liquidity Cereus has left.
Some players think that if they continue to play on Cereus it will increase the likelihood of getting paid. It does not seem that matters as some players that have continued to play on Cereus have never been paid and some players that play little if ever have been paid. Some players also think that by playing they will generate rake and that will help Cereus become more liquid. It is very doubtful that many players are depositing so all that is happening is the overall liabilities are being lowered but no cash is being added to the network.
According to Poker Scout Cereus has an average of 86 players. Since much of the action is micro limits it is safe to say that the average player is only raking a couple of dollars an hour. To be on the high side I will use $3/hr but it might only be half of that. This means that Cereus is only raking about $6200 a day. Throw in a few hundred for tournaments and side games and Cereus is likely taking in no more than $8000 a day in rake. At this rate is would take 6000 days to eliminate the $48,000,000 shortfall. It would take almost 17 years to clear this liability shortfall. This does not include salaries, affiliates, hardware upgrades, software maintenance, rent and other overhead all businesses have.
With $24 million held by non U.S. players that would mean that Cereus would have to take in $24 million in deposits just to wash out the debt. Considering that when Cereus was flying high they only seemed to have had $10 million in cash on hand I think it is safe to say getting $24 million deposited onto Cereus when they average less than 100 real money players is going to be impossible.
As I have suspected all along Cereus is insolvent, bankrupt, busto, whatever you want to call it. Non U.S. players will small balances might get paid in full. Non U.S. players with balances over $1000 and below $3000 have a 50/50 chance of seeing all of their money. Non U.S. players with more than $3000 may have to accept the fact that will only get about $.20-.25 on the dollar. Non U.S. players with balances well into the five figures may only get $.10 or less on the dollar. Unfortunately for U.S. players it is almost certain that player balances are lost forever.
I have been an outspoken opponent of Cereus ever since Scott Tom used to shill Two Plus Two under the Pokermachine username. They then got caught with an insider cheating scandal that may have lasted years, constantly changed their bonus terms, covered up their dishonest ways with more lies and lied about who was running the company by claiming it was new management and owners. They also stiffed their bondholders for over $200 million and stiffed the company that sold them Ultimate Bet. Even after all of this players still played there stating that the games and promotions were too good to pass up.
Black Friday was a terrible thing. I firmly believe that the U.S. has overstepped their authority and it has affected millions of people’s freedom. At least there was one good thing that came out of this. Absolute Poker and Ultimate Bet, the two most tarnished names in the history of online poker, will be forced out of business sooner rather than later.