Marvin the Paranoid Croupier: Are Robots the Future of the Casino Industry?

With casinos in the US and Canada desperate to cut costs on the one hand and sustained investment in robotics on the other, the robotic croupier may appear in the not-so-distant future.

The casino industry in North America is faltering. While more and more US states are licensing commercial casinos, profits are sinking in an increasingly saturated market. New casinos are popping up but Americans and Canadians aren’t matching that with increased interest in gambling. This is painfully obvious in New Jersey, where Atlantic City’s storied casino market is being strangled by competition from neighboring Pennsylvania and New York. In 2013 the Atlantic Club Casino and Revel Casino made casino news by declaring bankruptcy, causing more than 2,000 employees to lose their jobs.

What can be done to save sinking profits? One unconventional idea, while not currently feasible, could help cut costs in the medium-term: the replacement of croupiers with robots. Cheaper and more sophisticated machines must be developed, but down the road it could be much cheaper to replace humans requiring wages, break time, paid vacations and health benefits with robots requiring only an up-front purchase fee and occasional maintenance. Could the utopian/dystopian (depending on which you prefer) future of replacing humans with machines arrive in the near future?

What it would mean

According to the Bureau of Labor statistics the average croupier in the US earns only about $15,000 per year, which is barely enough to support a single person. However, when tips (which sometimes account for as much as the base salary), health benefits, pension and paid vacation are factored in the average croupier earns between $32,000 and $50,000 annually. Some larger casinos such as the Borgata in Atlantic City and the Sands Venetian in Las Vegas employ hundreds of croupiers dealing blackjack and baccarat games, spinning the roulette wheel and staffing the American poker rooms.

• Casinos across North America are facing sinking profit levels and are looking for ways to cut costs

• Replacing croupiers with robots would require a large initial investment, but would save money over the span of several years

• Tech giants Google and Amazon have recently made investments in robotics start ups; as the industry takes off it is conceivable that robotic croupiers could be developed

If a casino employs 300 croupiers at the cost of $25,000 per (including salary, benefits, pension and vacation but excluding tips) its total labor cost adds up to $7,500,000 annually. Let’s assume that one robot can do the work of two croupiers (because they don’t require an 8-hour shift), so the company buys 150 robots, which cost significantly less than $25,000 per year to maintain. While the initial cost of buying the robots will be very high, over several years it will be much cheaper than paying human croupiers. In addition, more gamblers will walk through the doors as they would no longer be expected to hand out tips.

While robots wouldn’t be able to replace pit posses, who perform management duties which a programmed robot can’t replicate (at least not yet), it would spell very bad news for croupiers.

Robotics picking up steam

There has been major investment in service industry robotics over the past decade. Google Ventures recently purchased a $2 million stake in the robotics firm Savioke. The firm’s CEO Steve Cousins previously worked on the PR2 robot, designed to perform simple tasks in such industries as hospitality, medicine, home care and restaurants.

This follows Amazon’s 2012 purchase of Kiva Systems, a robotics firm specializing in machines which move material in warehouses. Tech investor Mike Maples is optimistic that investments by these tech giants will provide the capital that the robotics industry needs to take off: “Google’s move into robotics will make it even more attractive to start-up investors because it accelerates the creation of a new category of opportunities.”

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Currently the robots that have been developed are not sophisticated enough to act as croupiers. They can only do simple tasks like move goods in warehouses, wait on customers in restaurants and assist surgeons while they perform operations. So for now, croupiers don’t have to worry about losing their jobs. But the last 2+ decades have shown us that technology has a tendency to sneak up on people. Twenty-five years ago the internet didn’t exist, now it is involved with nearly every aspect of our lives.

Now that big firms like Google are providing financial backing, the robolution (pardon me for the silly term, I just couldn’t pass it up) may hit the casino industry. Robots will have to be sophisticated enough to process large amounts of variable information as well as look out for card counting, which doesn’t violate American gambling laws but cuts into casino profits. The physical aspects of dealing are simple enough, but it will take some time to develop robots with the cognitive abilities that a croupier must have. We think it may happen down the road, but the robolution is not imminent.