DraftKings to Close Atlantic City Live Dealer Studio, Marking a Shift in Strategy

DraftKings has announced the closure of its Atlantic City live dealer casino studio, a decision that will result in the layoff of 101 employees and signals a broader shift within the US online casino industry. This move, effective January 31, 2025, comes as DraftKings seeks to cut operational costs by transitioning to third-party providers for its live dealer offerings. This decision highlights the financial challenges and strategic choices US-based online casino operators face in a rapidly evolving industry.

Transition to Third-Party Live Dealer Games

DraftKings’ decision to close its bespoke Atlantic City studio means that while live dealer games will continue for customers, the format will change. Instead of the custom in-house studio experience, players will soon encounter games streamed from third-party providers, most likely Evolution, which has an established presence in Atlantic City and already provided technology for DraftKings’ previous operations. According to a DraftKings spokesperson, the change will happen seamlessly, aligning with the studio closure on January 31, 2025.

As a part of the cost-saving approach, DraftKings is not alone. The US online casino sector has generated significant revenue, but many companies still struggle with profitability. The cost of maintaining an in-house live dealer studio, with its state-of-the-art technology and specialized staffing, is an expense DraftKings has decided to forgo. Instead, the company’s live dealer offerings will move to more generic but high-quality tables shared with other operators.

The Rise and Decline of Bespoke Studios in the US

DraftKings launched its custom live dealer studio in 2022, shortly after acquiring Golden Nugget Online Gaming (GNOG), an acquisition that seemed to position DraftKings to expand its live dealer capabilities. With GNOG’s roots in Atlantic City and the company’s early success in live dealer gaming, DraftKings aimed to build a branded experience that leveraged GNOG’s expertise. The studio initially thrived, providing DraftKings with unique branding opportunities and a personalized environment for players.

This shift away from an in-house studio raises questions about the future of bespoke studios within the US online gaming market. Other operators, like BetMGM and FanDuel, have followed DraftKings’ earlier model by setting up their own branded studios in Michigan and Pennsylvania, respectively. However, with DraftKings now pivoting towards third-party solutions, it remains uncertain whether other operators will follow suit to reduce operational costs.

Industry Trends and the Role of Third-Party Providers

As US-based operators navigate profitability challenges, the transition to third-party providers for live dealer games may indicate a trend towards a more standardized, shared-table format. Evolution, the global leader in live dealer gaming, operates one of the primary studios in Atlantic City and serves multiple operators through shared tables and exclusive branded offerings. Evolution’s brand, Ezugi, has also introduced cost-effective solutions, including innovative products like Triple Zero Roulette, which yield higher margins.

Live dealer games have gained popularity due to their ability to replicate the atmosphere of a physical casino, combining social interaction with real-time gaming. However, these benefits come with high production costs, including the need for extensive staffing and technology investments. As a result, some operators, including DraftKings, are exploring more budget-friendly options, such as Evolution’s First Person line or hybrid dealer products from companies like Inspired, which blend virtual elements with live experiences.

Although the Atlantic City studio closure marks the end of a particular chapter for DraftKings, the company assures customers that its gaming portfolio will continue to include popular live dealer games. From February 2025, players may experience a more generic live dealer environment, yet DraftKings’ branding will likely remain a visible part of the gaming interface. The games offered by DraftKings in New Jersey include various options, such as VIP Baccarat, Live American Roulette, Fun Fun 21, Cashback Blackjack, and Adventures Beyond Wonderland. The platform will still feature DraftKings-branded tables, shared alongside tables from other operators.

Source:

“DraftKings to shutter live dealer studio in Atlantic City; 101 employees impacted“, bizjournals.com, October 30, 2024.