DraftKings to Close Atlantic City Live Dealer Studio
DraftKings is set to close its live dealer casino studio located in Atlantic City and lay off a total of 101 employees, according to a notice filed under New Jersey's WARN Act. The WARN Act mandates that employers must inform their workforce of mass layoffs at least 60 days prior to the termination date, which, in this case, is scheduled for January 31, 2025.
The DraftKings logo on a wall inside one of its offices. (Source: DraftKings)
LISTEN TO THIS ARTICLE:This move marks a shift in DraftKings' strategic operations within the online gaming sector. The company, which opened a DraftKings-branded live dealer studio at the Hard Rock Casino Atlantic City in 2019, is scaling back on its live dealer offerings in New Jersey, a state known for its active online gaming industry.
The closure, according to media outlet Next.io, was communicated to staff on Monday, October 28, through an announcement made by DraftKings executives, who were physically present at the Atlantic City studio. The decision affects the workforce at the studio situated within the Golden Nugget Atlantic City, a site historically significant to the growth of live dealer gaming in the United States.
In 2016, Golden Nugget Online Gaming (GNOG) pioneered live dealer gaming in the country by launching the first live studio, which operated within the same Golden Nugget Atlantic City premises through a partnership with Ezugi, a subsidiary of Evolution Gaming. DraftKings' current closure decision highlights the challenges and ongoing evolution of the live dealer gaming space in the U.S. as operators assess and adjust their service models.
The Atlantic City studio had gained renewed momentum when DraftKings relaunched it in 2022, following its acquisition of Golden Nugget Online Gaming. In a deal valued at approximately $1.56 billion in stock, DraftKings absorbed GNOG's online gaming assets, aiming to leverage Golden Nugget's established brand and clientele in the iGaming industry.
Despite DraftKings taking over the online assets, the physical properties, including the Atlantic City casino, remained under the ownership of Fertitta Entertainment. The acquisition deal was part of DraftKings' broader objective to strengthen its foothold in the competitive online gaming and sports betting markets, leveraging the combined resources of both brands. By integrating GNOG's technology and expertise, DraftKings aimed to enhance its market position, particularly in regulated states like New Jersey where online gaming thrives.
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A Change in Direction
The live dealer studio in Atlantic City saw significant growth before DraftKings' acquisition. In the third quarter of 2021, GNOG expanded the studio, increasing its capacity from 18 tables to 33. This expansion was likely aimed at accommodating the growing demand for live dealer games, which provide players with an interactive casino experience streamed from a real-time gaming environment.
However, the demand for such services appears to have shifted, prompting DraftKings to discontinue this part of its operations at the Golden Nugget location. The closure suggests a recalibration of DraftKings' priorities within its broader gaming portfolio, focusing more resources on other products or technology-driven innovations in online gaming.
The timing of the layoff announcement, which came shortly after the relaunch of the studio, indicates that DraftKings may be reassessing its investments in live dealer operations. Given that the U.S. online gaming landscape continues to evolve rapidly, operators like DraftKings face ongoing decisions about where to allocate resources effectively.
The live dealer format, while popular, requires substantial investment in technology, physical space, and personnel, which can be more cost-intensive than other gaming products. As such, DraftKings' choice to shutter the Atlantic City studio may reflect an intention to streamline operations and direct capital to other strategic areas.
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