It’s Official, Cereus is Bankrupt

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.

6 thoughts on “It’s Official, Cereus is Bankrupt

  1. I love how little factual info. you have. Don’t state things as fact unless you know they are fact. Especially about U.S. player payouts. It is not public information as to how much money is frozen, and whether or not players will see any of that money. Your random guesses are not helping the situation. If you don’t have anything factual to report, then dont report, speculate, and present your articles as specualation, not fact.

    • I’m confused, are you disputing Elevengrover’s, the person who has been able to receive inside info about AP/UB for years, report? My math on how long it would take to rake the money off the tables? Are you disputing that having 9x your liquidity in immediate debt due and stiffing your investors does not make one bankrupt?

      Before making such a statement please give examples of what you dispute. I have followed this very closely and have my own sources here. AP/UB was not liquid before Black Friday, you are sorely mistaken if you think they are anywhere near liquid now. This was a rogue ponzi scheme with a history of stealing from their players, investors, vendors and business partners. This is not some legitimate business we are talking about.

      I am sorry if you are one of the players that will lose money on Cereus but my reporting their major liquidity issues is not going to change that. If this was a liquid business everyone would have already been paid. Are you saying they have the money but are refusing to pay? That would be the only other option which would make them just as rogue.

  2. I am saying we don’t know how much money is in siezed accounts. It is very possible that a partial payout payout for U.S. players could happen, even if was only 10 percent of account balances.

  3. One poster at Two Plus Two states that he was able to get SDNY to tell him there was $3 million seized from UB. Take that for what it is worth though. Note that t is common info that the feds are demanding $500 million in fines. The government seems very clear that they will not be returning any money to players and that the poker rooms owe the money. They have not done so yet and recently previous processor seizures from over a year ago were being distributed to the likes of local police departments. If you check out (Linwood’s website) it is clear that the government feels the money was seized from the gambling business, not the players and players should pursue the gambling business.

    While I could be proven wrong I predict the money seized is lost forever. There is no precedent for the feds returning seized money to online gambling businesses. They have always kept the money which is why I think the feds have been so adamant that online poker is illegal, the cash they can grab is well worth the effort put into it.

  4. Yikes. Tough to argue that. I guess I just have to hope that AP stumbles upon some burried treasure in the Carribean and is then willing to dispurse it.

  5. Thomas from Subject Poker states that his research shows that Cereus has at least $11 million being held by the feds. I cannot imagine the poker world will ever see that money again, player or Cereus.

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