Scalable Live Dealer Technology Transforms Low-Margin Casino Games

Low-revenue casino games have always played a unique role on the casino floor. They serve as an entry point for new players, drive foot traffic, and create a lively atmosphere that is essential for any casino’s energy. However, from a revenue optimization perspective, these games have long been problematic. Their low-profit margins make them difficult to justify when maximizing the casino floor’s revenue per square foot.

Historically, casino floor layouts have evolved incrementally, yet consistently, over the decades. Take, for example, the original MGM Grand’s central keno pit—a labor-intensive operation with a high house edge. Despite its profitability due to the high house edge, the keno pit was downsized significantly when the MGM Grand reopened after the fire in 1980. This is a reflection of the broader trend: labor-intensive, low-margin games gradually being pushed out in favor of more profitable options.

One of the most famous low-margin games is the single-deck 3:2 blackjack. While popular with players due to its favorable odds, it is not as kind to casino operators. The combination of a slim house edge and the costs of maintaining a dealer often leads to net losses during off-peak hours. For instance, a blackjack table with a minimum bet of $5.00 and six players could still lose money if only two players are present, with the casino paying more in labor costs than it earns.

This challenge in casino management led to the gradual phasing out of such games in favor of more profitable alternatives. For example, on April 28, 2024, El Cortez Hotel and Casino replaced its last live 3:2 single-deck blackjack game with a double-deck blackjack variant. This switch, motivated by the need for higher profit margins, reflects the constant pressure on casinos to maximize revenue.

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However, technological advancements are set to change this dynamic. The introduction of scalable live dealer systems allows a single dealer to serve an unlimited number of players within a given jurisdiction. This technology transforms the economics of low-margin games like single-deck blackjack. Instead of losing money with a small number of players, casinos can now break even with as few as eight players and begin generating pure incremental revenue as more players join.

Traditional six-position tables are limited in their profitability, often resulting in losses when fewer players are involved. However, with scalable live dealer operations, profitability increases as the number of players grows, even for games with traditionally low margins.

This breakthrough was highlighted by SCCG Research in its latest brief, published on August 29, 2024. The report details how businesses are leveraging technology to scale human operations profitably, creating win-win scenarios for both operators and customers.

The future of casino floor management could be radically transformed by these scalable live dealer systems, allowing casinos to reintroduce player-friendly games without sacrificing profitability. As these technologies continue to develop, they promise to reshape the economics of the casino floor, making it possible to offer a wider variety of games that appeal to all types of players, while still maintaining a profitable operation.

Source:

Scalable humans: Live dealer technology enabling the low-margin games players love, Gambling Insider, August 29, 2024.