Only South of the Border does a better job touting its upcoming arrival than casinos.
In Pennsylvania, billboards promote casinos from “just off this exit” to a “short drive down the Atlantic City Expressway.”
Casinos are built to invite you in with gigantic LED signs and animated displays. During Live! Casino Philadelphia‘s grand opening, strobe lights outside the entrance pointed toward the heavens and could have guided the Rocky statue to the state’s newest casino.
However, the home of one of the most anticipated arrivals for gamblers in Pennsylvania is quite different. To go there, you need an invite, temperature checks, a trip through a maze of hallways, a ride up a freight elevator, an employee escort and please, no pictures.
It’s all to ensure the safety of employees and the integrity and fairness for you, the players of live dealer games.
Live dealer popular with players
Pennsylvania was the fourth state to launch iGaming with Hollywood Casino debuting its online option in July 2019. Libraries for PA online casinos contain slots, video poker, table games like Blackjack (IGT Single Hand Blackjack or NetENT Blackjack), roulette, and baccarat. But PA operators’ iGaming rosters pale in comparison to New Jersey’s. And at the start, they were missing a very popular option: live dealer.
The popularity and the eagerness for live dealer games from gamblers in Pennsylvania didn’t come as a surprise. Live dealer games feature a human dealer with real cards. And you can play from the comfort of your home on your phone, laptop or tablet.
Some reasons players prefer live dealer:
- Social interaction
- Slower pace
- More entertaining than playing against RNG (random number generator)
- Trust playing a live dealer more than RNG
Live dealer games in Pennsylvania are powered by Evolution Gaming, the world’s largest supplier of live casino games. Evolution handles licensing the software and broadcasts via live stream from a studio to online casinos. In PA, live dealer is available at a growing number of online casinos including DraftKings, FanDuel, BetMGM and Hollywood Casino.
Evolution sets up shop in Pennsylvania
With headquarters in Stockholm, Sweden and Malta, Evolution and its live dealer games arrived stateside in New Jersey in 2016.
BetRivers, DraftKings, and Hollywood Casino were the first to launch live dealer games in Pennsylvania in October 2020 and a number of other online casinos followed. Live dealer studios must live stream games from within the state where they offer games, per gaming law. For instance, Evolution’s New Jersey’s studio could not broadcast games for Pennsylvania online casinos.
James Stern, Evolution’s chief business development officer, explained the expansion to the Keystone State:
“Demand for our Live Casino services in the US has been phenomenal. We are delighted to be further expanding our US operations by opening a standalone studio in Pennsylvania to serve both online operators and land-based casinos in the state. We are looking forward to opening up our world-leading live casino portfolio to operators and players in the state of Pennsylvania. Evolution continues to stay at the forefront — maximizing the opportunities in this exciting new market and growing together with our licensees.”
Richard Schwartz, President of Rush Street Interactive which operates BetRivers and PlaySugarHouse, said at the time of launch:
“Many online players prefer live dealer options because they watch the action as it happens, which gives them a higher level of trust in the outcome. A live dealer game is the closest you can get online to playing in a land-based casino and we’re thrilled to be the first to offer players in Pennsylvania the opportunity to virtually sit and play on Evolution’s world renowned live tables.”
Always live dealing in Philadelphia
Bryant McKay is the Senior Team Manager at Evolution in Philadelphia. Evolution moved to Philadelphia in October 2020 and McKay is an amiable host and tour guide.
Safety and the integrity of the games is the top priority. COVID protocols are strictly in place. I have to leave my purse at the door before entering the studio and the place is impeccably clean.
I sit with McKay and Samantha Steele, Employer Branding and Communications Specialist, in the socially-distanced break room with a beautiful view of the city of Philadelphia. McKay comes to Evolution after managing large-volume call centers. He is tasked with staffing Evolution’s Philadelphia location with 250 employees. Most will be “game presenters,” Evolution’s term for dealers, for the 24/7/365 operation.
“From the operational perspective it’s been fun bringing it all together,” says McKay. “If you look at our floor, it’s representative of Philadelphia. It’s a melting pot. We look for someone who is energetic, lively and can communicate. We can teach them the games.”
Evolution now hiring
Evolution is currently hiring employees for its location in Philadelphia and, part of the appeal of playing at home for some is also a draw for prospective employees.
It’s a smoke-free environment. Casinos in PA are following COVID-19 protocols. However, some people with pre-existing conditions or living with high-risk individuals might prefer working at a place with far fewer people than your average casino.
Even though players aren’t physically seated at the table, it’s important for game presenters to be engaging and professional.
“We want the players to come back because of how personable you are,” says McKay. “It’s something we base our values on – employees who value servicing the customers. It’s how we will thrive and continue to grow. One of the things we stress in onboarding is professionalism and engagement. All of our game presenters have unique personalities and a desire to make the customer want to come back.”
Players create a screen name and can interact with the dealer through the chat function. Of course, players can choose to not chat. And like anything that gives people the choice of anonymity behind a screen name, the chat can turn a bit sour especially if players are on a cold streak. But, you can also come across a range of chat topics like “favorite type of potato” to “how is your March Madness bracket going?”
There is also an option at the top of the screen for players to tip dealers.
Live dealer games, rules and regulations
The movie theater or Netflix.
Watching the game at a sportsbook or betting on an app from your phone.
Sitting at the Blackjack table in a casino or playing a couple hands from the comfort of your couch.
The options have evolved.
“We offer something the land-based casino cannot, the ability to be comfortable at home,” said McKay. “The difference of being able to sit at home, and transfer the money to a personal account, you can’t beat that.”
In Pennsylvania, Evolution live dealer games currently include:
- Blackjack (with side bets such as 21 +3 and Bet Behind)
Not surprisingly, there are more Blackjack tables than any other games and it is the most popular.
Shuffling is done by hand by a live dealer who is visible on camera coming in to shuffle.
All online casino games in Pennsylvania including live dealer are regulated by the Pennsylvania Gaming Control Board (PGCB). Games must also adhere to approved rules, side wagers and payout tables.
PGCB Director of Communications Doug Harbach explained:
“Since there is a human element in this online gaming, the PGCB must license studio staff who operate the games as we would dealers in a land-based casino. Also, similar to table games setups at land-based casinos, we have to ensure adequate security and surveillance in the studio that allows us to monitor the live dealer and help us ensure the operator conducts table game operations in accordance with PGCB regulations.”
iGaming table games have seen increase since start of live dealer
In February, the top revenue earners for table games were:
- Penn National (DraftKings, Hollywood Casino, BetMGM): $10.3 million
- Valley Forge Casino (FanDuel): $8.9 million
- Rivers Casino Philadelphia (BetRivers and PlaySugarHouse): $2.8 million
They all offer live dealer games.
However, monthly reports from the PGCB do not break down iGaming wagers and revenue for live dealer versus other online casino table games. But top line numbers before the debut and after the launch of live dealer show a clear increase in wagers.
Penn National’s online table games wagers spiked 83% from pre-live dealer (Sept.) to the most recent revenue report (Feb.).
Penn National online table games wagers and revenue with and without live dealer
|Online table games
FanDuel Casino online table games wagers and revenue with and without live dealer
|Online table games
When asked if he could comment on a month-to-month increase in user volume, McKay said:
“Without delving too much into it, we have seen significant increases (in user volume). I think we struck lightning in a bottle. Not only was gaming moving toward online, but COVID pushed everything along faster and live gaming became more popular.”
“Literally about to explode”
Like its moniker, Evolution continues to grow.
A second studio space for more tables and games is already under construction in their current location. It should be ready by the end of Q3.
“When I know I’m tasked to have 250 employees, not only do I have that ‘good anxious feeling,’ I also feel it’s literally about to explode,” said McKay. “No matter what happens, we will never go back to what it used to be from a gaming, health and safety perspective.”
According to a recent Motley Fool article, the majority of Evolution’s revenue is from the 10% take rate from casino customers. For example, for every $100 in revenue DraftKings makes with Evolution’s games (Evolution also offers online slot titles), DraftKings pays $10 to Evolution.
Also, if the casino operates at a loss, Evolution has protection. $EVO trades on the Stockholm exchange ($EVVTY on US:OTC) and closed April 8 trading above $157.
Here is Motley Fool‘s take on the financials of Evolution Gaming Group:
In 2020, Evolution’s revenue grew 53% to $669 million, but EBITDA grew even faster, up 82% to $396 million for the full fiscal year. This margin expansion shows the tremendous scalability in Evolution’s business model, and why profit margins should continue to expand if it grows within its existing markets.
The one risk for Evolution and its phenomenal profit margins is a customer like DraftKings negotiating a lower take rate once its contract comes up for renewal. But if both companies are doing well under the Evolution system, and no competitor emerges with the breadth and scale of Evolution’s offerings, the likelihood of this happening seems low. Plus, the contracts with casinos typically last for three years, so it is not like these risks are at play every month.