DraftKings making noise among NJ online casinos
Online Poker Report

DraftKings Casino Brings Innovation To New Jersey Online Gambling Industry

DraftKings Casino

DraftKings might be known to its customers and the general public as a sports brand, but it’s put a lot of work into its casino product this year.

The new DraftKings Casino is only available in New Jersey for the time being, but it should be coming to Pennsylvania soon.

Furthermore, the company now deals in place with Caesars and Penn National Gaming that guarantee it a land-based partner for both sports betting and non-sports gaming in dozens of states.

DraftKings Casino makes an immediate mark

DraftKings’ NJ online gambling operations predate that deal, licensed under a standalone partnership with Resorts Atlantic City.

The first DraftKings Sportsbook opened in August 2018, followed by a test rollout of blackjack in December. The full DraftKings Casino launched in early January this year, though there were only five games at the time: blackjack, plus roulette, video poker and two slots titles.

Live dealer games joined the mix the following month.

Resorts has multiple online partners, making it impossible to know exactly how much money DraftKings Casino is making. What is clear is that Resorts’ online casino revenue rose from $3.8 million in December 2018 to $6.1 million in February 2019.

Even correcting for seasonality and the overall growth of the market, DraftKings added at least $1.6 million in monthly revenue despite a sparse game selection.

Figures for more recent months corroborate the idea that DraftKings likely accounts for about one-third of Resorts’ online casino revenue.

DraftKings pillars: Innovation and analytics

DraftKings didn’t invent daily fantasy sports (DFS); it existed as a concept for a few years before the company was founded in 2011. It did, however, play a huge role in popularizing the format as an alternative to both sports betting and seasonlong fantasy leagues.

Compared to the longer-established, traditional operators competing in the booming US online gambling market, it’s a safe bet that DraftKings will be among the more innovative brands.

Since launch, DraftKings Casino has expanded its slate of offerings from five to a little more than 40;  still a small number compared to its competitors. This is deliberate, though. Most online casino games come from third parties, and it’s common to find the same title across multiple sites. It wouldn’t be much trouble for DraftKings to follow suit.

Instead, the company’s philosophy seems to be that less is more and that the overall customer experience is improved by showing players only what they want.

DraftKings Head of Gaming Jason March made as much clear in a recent interview. His company is a tech enterprise with a belief in analytics, he says, so they are “not going to just throw up 500 games and see what sticks.”

Creating hybrid online casino games

DraftKings also seem to be working to create a hybrid between the online and live gambling experiences.

In a sense, this concept stays true to the company’s roots, as daily fantasy sports by its nature combines real-world sporting events with an online component. Both DFS and sports betting make use of data and features that are difficult to implement in a brick-and-mortar environment fully.

For DraftKings Casino, the emphasis appears to be on live-dealer games. These were initially offered using the studios of Evolution Gaming, one of two companies that provide studio space for NJ online casinos. DraftKings opened its studio in cooperation with Evolution in July, however, to be able to offer unique games under its branding.

So far, the only innovation DraftKings has brought to the games themselves is a single high-speed baccarat table — where the cards are dealt face-up from the start of the hand. While it may seem like a minor cosmetic change, it significantly speeds up play. That, in turn, allows lower limits and brings the overall pace of the game closer to what players expect from an online product.

DraftKings has also taken advantage of the new studio to set up special screens behind its dealers, allowing it to show additional content to players while they play. Screens, within a live environment, within a screen may seem like overkill, but players are used to such a sensory overload inside casinos.

Embedding content right into the interface is better for customer immersion than displaying such extras in a separate panel.

A regular stream of new products

DraftKings pledged to continue releasing games weekly, featuring third-party games for which it has identified a demand. There will be more in-house games too, however, including a progressive slot and something called Hallowe’en Roulette.

The company is something of a unicorn among NJ online gambling brands. Except for its primary competitor, FanDuel, no other operator has an identity so closely tied to sports. Its customer demographics presumably reflect that, informing the direction of innovations to come.

DraftKings revealed, for instance, that its desire to incorporate sports content and branding was part of the reason for building its live dealer studio. Dealers might wear sports jerseys during special events and home-team games, for instance, and the background screens will show sports imagery.

The company eventually hopes to obtain broadcast rights to show live sporting events, simulating the experience of being on a casino floor with the game being shown on a TV nearby.

Content deals, like the one DraftKings’ established with Major League Baseball, open up additional options. It could, for example, develop a baseball-themed slots product that uses real team names and logos. This is something competitors who are relying on third-party products would not be able to do.

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True game-changers are risky (and rare)

It’s tempting to speculate about bigger innovations to come, integrating real-world sports with casino games in some deeper way. The nature of regulated gambling, however, is that it anything really different runs a high risk of failing to get approved quickly — or at all.

On top of that, operators risk putting players off with unfamiliar or complicated mechanics.

Online poker is rife with examples of that, with the most extreme being the PokerStars experimental game Power Up. It is one of many cases in which substantial development and regulatory costs did not yield a product with traction in the market.

We’re more likely to see more innovations along the lines of fast-deal baccarat, as DraftKings uses analytics to spot weaknesses in existing products. We’re also likely to see sports-themed promotions tying the existing casino, sportsbook and DFS products together. These are easier to develop and present less risk than building new standalone products.

It may also be, however, that whatever concepts DraftKings decides to try in New Jersey will be precursors for bigger things to come. NJ will eventually become just a small part of the overall US online gambling market. The state is an ideal test environment for a company oriented toward analytics and bootstrapping.

How players react to small changes in New Jersey is likely to inform the avenues the company explores elsewhere going forward.

Alex Weldon
- Alex is a freelance writer and artist living in Dartmouth, Nova Scotia. He has been doing data-based analysis of the online gaming industry since 2016.
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