Operators Starting To Grow Their In-House Casino Games

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Right now, only six states allow legal online casino gambling:New Jersey,Pennsylvania, Michigan, West Virginia, Connecticut, and Delaware. 

Clearly, there is plenty of room for the industry to grow, and it’s not exactly a trade secret to note America’s sportsbooks and casino operators are looking to a future where more and more states legalize iGaming.

But even with a mere six states live, operators are doing plenty of experimenting when it comes to their online casinos. This was highlighted in the March 2023 Eilers-Fantini Online Game Performance Database report, which showed internal games — those are casino games produced by the operators themselves — now account for nearly 8% of the gross gaming revenue in the U.S. market.

In fact, the “internal” sector is now the fourth largest creator of online casino games in terms of GGR, behind perennial powerhouses Evolution, IGT, and Light & Wonder.

One major reason for the operators to create their own games? Cost.

“The rise of internal games in online casinos does provide cost savings for operators, which is likely the leading factor for development,” said Rick Eckert, the managing director at Eilers & Krejcik Gaming. “Operators traditionally can pay suppliers between 6-12% of revenue based on title, game mechanics, and intellectual property tied to the specific themes. This allows the operator to strategically save on expenses and potentially reinvest this savings to players through marketing initiatives and bonusing.”

DraftKings leads the way

Eckert notes the majority of the titles created by operators are the traditional, easy-to-duplicate table games such as blackjack and roulette. BetMGM, FanDuel, DraftKings, and other operators have gone down this path.

And while the Eilers-Fantini report doesn’t delve into individual operators and their games, one operator seems to be putting more effort into its internal menu, and that operator is DraftKings.

DK has 54 titles in-house, including more than a dozen blackjack titles.

But it also has some games that step outside the traditional games, including Rocket, a game where you can wager as little as $1 and watch as a rocket takes off. Every moment the rocket is airborne, the amount of money you can win goes up. It starts small, in the pennies, but the longer the rocket stays in the air, the quicker the multiplier increases. To win, a player would need to hit “stop” before the rocket explodes.

“We have seen a lot of popularity with our exclusive DraftKings Casino games including Rocket, which in 2022 became available to players in all five states where DraftKings Casino is live,” a DraftKings spokesman told US Bets. “We love seeing positive responses to our games, it further validates that our team is creating content that resonates with our players.”

DraftKings has also created more traditional slots, like American Treasures, a typical 5×3 slot that is American-themed, and Loki’s Luck, which is more concerned with Norse gods.

But perhaps the most interesting games DraftKings has released are titles that came out in 2023: Andrew Dice Clay Craps and Hart-Race Hold’em, which features Kevin Hart.

In the craps title, it’s traditional craps, but with Andrew Dice Clay chirping in your ear after every roll of the dice. He even gives a tutorial for those unfamiliar with the game. Additionally, the player is given a choice as to how profane they want their Diceman to be: Choose between “no dice” and “pretty dicey.”

As for the Kevin Hart title, it’s Texas hold’em with a twist: Hart starts with double the chips, but he has to go all-in with each deal. The player can either go all-in or fold, and each hand is met with Hart commenting on the hand. 

Down the AI path

These two games in particular may prove to be the first baby steps toward a future where artificial intelligence, large language models, become a de facto opponent for game players.

“I think machines/virtual dealers being able to have real-time conversations with patrons is not unrealistic,” said Kasra Ghaharian, Ph.D., a senior research fellow at the UNLV International Gaming Institute. “A more dynamic and less predictable machine-player interaction could create a highly engaging experience.”

Ghaharian also believes that type of interaction can also work the other way, where the “machine” can talk to the operators to help smooth over complaints and requests.

In the meantime, it’s not exactly a reach to think the operators themselves will be in the vanguard of whatever new tech comes down the pike. Again, keeping things in-house lessens the cost, and the battle for customers is only set to increase in the coming years as more states come around to legalizing online casino.

“I absolutely expect the internal segment to continue growth and may further be expedited by mergers and acquisitions, operators acquiring smaller suppliers,” Eckert said. “Unlike the land-based side of the market, operators don’t need to worry about hardware costs as some newer slot machines are now running upward of $30,000 each. Instead, operators only need software development, which will likely lead to operators trying non-traditional mechanics.”

The future of online casino is wide open, and it’s in the operators’ best interest to create the next generation of online play. Stay tuned.