Ggr meaning casino

Every online casino business model needs benchmarks to measure its progress. Key performance indicators can show business owners what they’re doing right — and wrong. Here are some of the most important online casino KPI’s you can use to analyze and improve your business.

Successful businesses make decisions based on data. Any step you take without weighing all the relevant information could just as easily take you down the wrong path as the right one — and you might not even realize you’re lost until it’s too late.

That’s why companies use KPIs to measure the health of their business. Just like in every other industry, there is no single recipe for running a gambling project, but knowing what markers to measure can tell you if you need to sweeten a bonus, fatten up your VIP rewards, or cut down on acquisition spending.

Read through to the end to find out how to use the KPIs described below to evaluate your online casino’s performance.

What are KPIs, and how do you use them?

A KPI, or key performance indicator, is a quantifiable measure that companies use to track their performance over a certain period of time. KPIs are used in business analytics to keep track of your progress.

If your company made $120,000 in GGR last quarter, and you want to see a 3% improvement, your target KPI for next quarter is $123,600. If halfway through the quarter, you’ve racked up $61,800 in gaming revenue, you’re right on target.

Of course, setting a KPI is one thing, but achieving it is another.

Once you’ve set your eyes on a target, the next step is to roll out an action plan for how you’ll get from point A to point B. For example, let’s say you want to boost your sales by 10%. Increased sales often flow from increased marketing. Will you offer more bonuses? Add a tier to your loyalty program? Conduct an SEO audit of your site to see what you can optimize and how? Reach out to churned players?

What is GGR?

Gross gaming revenue, or GGR, is a measure of all the money generated by player losses in a certain time period. It’s calculated by subtracting player winnings from the total amount wagered.

Here’s the formula: GGR = A - B

Where:

A = total amount wagered

B = total amount paid out

It’s simple enough. Gross gaming revenue is the amount of money that was transferred during gameplay from the players to the casino. GGR does not account for payouts such as bonuses; it’s a pure measurement of the results of the game. It shows how much players lost over a given time period.

So assume the sum total of all player wagers on BigBet casino in the year 2022 was $37 million, and the sum total of all player winnings was $23 million. In that case, BigBet’s GGR was $14 million.

This is where you can really see the advantage of aggregators. When entering a contract with a game provider independently, you’ll sign over a portion of your monthly GGR to the provider.

Players like to know they have options at their disposal, so inevitably, you’ll need content from multiple providers. However, even if the revenue share is as low as 5%, when signing contract after contract, the costs can quickly balloon.

If you wind up owing half your revenue to your game providers before you’ve even started to account for the other costs associated with running a business, you’re in deep trouble. With an aggregator, however, you sign a single contract — and pay a single fee — for access to thousands of games from dozens of providers.

There could be a number of different causes for a decline in GGR, and it won’t always be clear which one of them is affecting your casino’s performance. Two good starting points are bringing in more players and encouraging the ones you already have to spend more.

Employing promotions such as tournaments, jackpots, free spins, and bonuses can encourage new players to sign up and players with existing accounts to make new deposits and play — but be careful; it’s absolutely necessary to have clear, well thought-out terms and conditions to prevent bonuses from being abused.

What is NGR?

Net gaming revenue takes a few more factors into account.

Net gaming revenue (NGR) is gross gaming revenue minus bonuses, chargebacks, commissions paid to payment system providers, royalties paid to game content providers, licensing fees, and taxes. NGR offers a comprehensive picture of an online gambling project’s performance, and it’s one of the most commonly used terms in the industry.

NGR gives a quick, neat sum-up of an online casino’s performance. The figure is more in-depth than GGR, taking a wider variety of costs into account.

Here’s the formula: NGR = A - B - C - D

Where:

A = total amount wagered

B = total amount paid out

C = total of all bonuses paid out to players

D = total of all taxes paid on gaming revenue

To continue from our BigBet example ($14 million in GGR), imagine BigBet handed out $2 million in bonuses and paid $1.4 million in gaming tax. This pins the NGR at $10.6 million.

GGR vs. NGR

While GGR purely measures a casino’s winnings, NGR accounts for more of its expenses. GGR (or its UK equivalent, gross gaming yield or GGY) is often used as a basis for taxation, as well as payments to platform providers and game developers.

GGR and NGR are both very commonly used KPI’s — and not just at the level of an individual business. GGR is used at the national, regional, and worldwide level, as well as on a product-by-product basis.

For example, regulatory bodies like the United Kingdom Gambling Commission track the growth of the industry by compiling the GGR of all the licensed casinos operating in the UK. The European Gaming and Betting Association tracks the size of the gambling industry within the 27-nation bloc. Data analysis firms will also measure the gross gaming revenue of specific products, like live dealer games or sports betting.

Ultimately, NGR will be only a small fraction — such as 2% — of turnover, or the total amount that players wagered during a certain time period.

Other markers

But these KPIs alone aren’t enough to keep you updated on the status of your business. In fact, you won’t even find them in most iGaming brands’ year-end reports.

Instead, you might see “Revenue” at the top of an income statement, followed by “Gaming duties” and “Other costs of sales” as you scan down, landing on Gross Profit (and plenty more afterwards).

When you zoom out and look at the whole business, there are many more factors involved — operating costs, other expenses, the depreciation of assets, employee salaries, and much, much more. Look here for an introduction to financial statements for online casinos.

Money-related KPI’s

These KPI’s will help you take a cold, hard look at your balance sheet. GGR and NGR are just the beginning of a long list of KPIs that online casinos use to measure their performance.

Bets-to-deposits

Out of the total amount players deposit, how much do they bet? Deposits alone don’t do much for your balance sheet; players should be putting their money on the line.

NGR-to-deposits

NGR-to-deposits represents the percentage of player deposits that turns into revenue for the casino. Ultimately, only a small percentage of turnover will turn into NGR, so players need to be betting as much as possible. This allows you to gauge how much of their deposits players are wagering.

Analyzing NGR-to-deposits and bets-to-deposits can tell you how much incentive you’re giving players to follow through and make their wagers once they’ve set up their account. In a way, it’s similar to an e-commerce website trying to figure out why shoppers put items in their cart and then abandon it before checkout.

If players are making deposits but not following through and making bets, one problem may be your game offering. Your game portfolio may not have enough new or enticing titles for players to enjoy.

People-related KPI’s

Running from marketing and advertising to how long players’ loyalty lasts, these KPI’s are used to examine how users are interacting with your platform.

Conversions

Conversion rate compares the number of users who could have possibly performed a target action with the number that successfully completed the action.

For example, you’d compare the number of people who received an email with a CTA in it and the number who clicked on it. Doing so over the course of many email campaigns would inform the copy used in your email messaging, sticking to what works and abandoning what doesn’t.

Breaking down the customer journey can help you find the weak links in the chain. Starting with the moment that players first become aware of your brand — for example, by seeing an advertisement on an affiliate site — you should map their progress towards becoming a loyal, long-term VIP player.

Conversion: visitors to signups

Of all the potential new players who view your site, how many sign up and create an account? Looking at the conversion rate for this stage of the customer journey could indicate whether or not you need to improve your bonus offers or other promotions in order to entice visitors to your site to sign up.

Conversion: signups to deposits

Of all the players who sign up and create an account, how many follow through and make a deposit? If there’s a disconnect between sign-ups and deposits, for example, it could be time for a better sign-up bonus.

Retention and Churn Rate

Once users are converted into depositing players, how long do they stay?

Retention is normally measured over a specific time period. You might track the average 3-month, 6-month, and 12-month retention rate to get an idea of how long players tend to keep coming back to your platform before leaving.

Every market is different. Players around the world have their own game preferences and budgets, and respond differently to promotion campaigns.

Analyzing churn rate can not only help design or improve retention strategies, but indicate potential bonus abuse — players who churn immediately after they’ve satisfied rollover requirements may be bonus hunters; if too many of your signups behave in this way, you may need to rethink your bonus strategy.

There’s no single fix for a drop-off in retention, but it does indicate that something is wrong. A high churn rate can indicate player dissatisfaction, increased competition, insufficient game offering, or other deficiencies.

Online casinos normally keep detailed statistics tracking their players’ interaction with the site, and can closely analyze each player’s behavior, including things like deposit amounts and frequency. You can use this analysis to try and decrease churn rate.

Successful casinos find ways to turn casual, one-off visitors into loyal, long-term players. One of the most common — and most effective — methods is VIP programs, where players earn perks, rewards, and improved personal customer service as they demonstrate their loyalty with sizable, consistent deposits. In this model, the casino becomes more valuable to the player over time, and vice versa.

There are other ways to combat churn and improve retention. Adding new game releases to the site’s portfolio — and promoting them by placing them front and center on the casino’s main page — can increase player interest. Casinos can also offer other promotions, such as tournaments, and increase contact with players by using SMS marketing.

Monthly Active Users (MAU) and Daily Active Users (DAU)

These two KPI’s are fairly straightforward, tracking how many players are active on your casino in a given day or month.

Average Session Length Per User

This is a measurement of the average amount of time players spend on your platform in a single session.

Obviously, the longer, the better. Declining average session length could indicate that you need to refresh your gaming catalog with new titles or products. Average session length could also be, for example, cross-referenced with game preferences to indicate which forms of games promote longer playing sessions.

Hybrid KPI’s

The online casino KPI’s in this section relate to both user behavior and its financial implications.

Cost Per Acquisition

Cost per cquisition (CPA) is the amount of money it takes, on average, to acquire a new user. In order to make sure your marketing efforts are worth your while (and your budget), it’s essential to track their performance; analyzing CPA will show you, on average, how much money it takes to bring in a new first-time depositor.

There are a few different ways that online casinos generate traffic. Search engine optimization, or SEO, is a very common way for online casinos to bring in new visitors. Paid ads and link-buying are two ways that online casinos can raise their profile — especially in markets where advertising is heavily restricted.

Affiliate networks, where affiliate partners such as bloggers and streamers redirect their traffic towards online casino platforms, are widely used throughout the industry.

Average Revenue Per User (ARPU)

Average revenue per user (ARPU) indicates how much revenue is generated by a single player in a given time period. To calculate ARPU, take the casino’s total revenue for a given time period — usually a month or a year — and divide it by the number of active players during the same time period. This will show, on average, how much revenue is generated by each player.

Customer Lifetime Value

Customer lifetime value (CLV) is a measurement of the total revenue generated by a player for as long as they stay on the platform. To calculate CLV, multiply monthly ARPU by average player lifetime.

Cross-referencing customer lifetime value by player segment could show you which demographics are likely to provide the most value to your casino. Analyzing historical CLV could help predict future CLV, helping you plan retention strategies.

For a full evaluation of your marketing strategy, CLV can be compared with CPA. Stack up the cost of acquiring a new player and the value a player brings; you can’t be spending more on getting players than they’re spending on slots or sports betting.

If it seems that CLV is slipping, you should look at both how much players are spending and how long they’re staying on your platform.

It’s critical to track and analyze data related to player behavior in order to develop your growth strategies and come up with new solutions. Online casino KPI’s like the ones detailed above give online casino operators the different lenses they need to look through for a clear picture of how their business is doing.

How can Slotegrator help?

Starting an online casino is a daunting challenge with the potential for great rewards — if the business is properly managed. A huge part of effective management is making well-informed decisions based on careful analysis of accurate information.

With over a decade of experience launching successful online casino and sportsbook projects, Slotegrator knows the iGaming business inside and out. Our Turnkey solution offers several modules for effective management of an online casino, among them an artificial BI module that not only allows you to collect and analyze data from the platform, but also enables anonymous and confidential comparison of your statistics with the relevant projects of competitors in a chosen region.

Reach out to our sales staff for a free consultation and find out what our platform software can do for you.

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