Understanding Gross Gaming Revenue and Its Calculation
In the iGaming industry, one of the most important performance measures is Gross Gaming Revenue. It shows how much money a gaming platform earns before any deduction or expense.
In this guide you’ll understand what Gross Gaming Revenue is, and it will help you track your gross revenue profit and plan better strategies.
What Is Gross Gaming Revenue?
Gross Gaming Revenue is the total amount of revenue that an iGaming platform earns after giving out all the reward money, but before subtracting expenses like bonuses, taxes, or operating costs.
In simple terms, GGR represents how much money is earned by a gaming platform from all the gaming activities. It applies to different types of gambling, like casinos, sports betting, poker etc.
For example, if a player bets $10,000 and wins $9,000, then the casino’s GGR will be $1,000.
These numbers help the casino owners to analyze the actual gaming performance before additional costs are applied.
Why Is GGR Important in iGaming?
GGR plays a very important role in measuring the success and financial performance of an iGaming business. It is also used to calculate affiliates’ commission, understand customer value, and plan marketing strategies.
- Helps Businesses Measure their Growth
By analyzing their GGR, casino owners can see whether their business is growing or slowing down. It also helps them to prepare strategies accordingly. If there is steady growth in GGR, it means that new players are joining in and the iGaming business is growing.
- Calculate the Affiliates’ Commission
Commissions are usually calculated and paid out as a percentage of revenue produced from players referred by the affiliates. Therefore, affiliates seek accurate GGR to determine how much they will earn from their promotions.
- Improves Financial Transparency
GGR creates a clear view of the company’s total income before any deductions. This helps the investors and partners to understand the potential of the iGaming platform.
How to Calculate Gross Gaming Revenue
Gross Gaming Revenue = Total Player Bets – Total Player Winnings
For eg.- If a player bets $100,000, and wins $85,000, then the GGR will be $15,000.
So, GGR = 100,000 – 85,000 = 15,000
This $15,000 is the amount the casino earned before any deductions.
In real operations, other factors like bonuses, jackpots and free spins may also affect the GGR calculation. Many casinos might also include or exclude these things depending on their accounting rules.
The Role of GGR in Casino Affiliate Marketing
In casino affiliate marketing, the GGR decides how much the affiliates will get paid. Affiliates promote the casino brands and attract potential players to the iGaming websites through their social media, blogs or campaigns. Once the player joins and starts betting, their activities start contributing to the GGR. Here’s a better explanation:
- Affiliate brings the player
When a player signs up for a casino from an affiliate’s site, they will be linked to the casino website using a unique tracking link.
- GGR is Calculated
Each time a player wins money, the casino website tracks the information. The GGR is then calculated by subtracting the bets from the winnings.
- Commission is Paid
Affiliates receive some percentage of the GGR. For eg.- If the referred player wins $1000, then the affiliates will receive $300 from it (30%). This amount usually varies from platform to platform.
GGR ensures that the affiliates earn from ongoing activities of the players and not just from one-time registration.
Factors That Affect GGR
Many Factors can influence the overall GGR of an iGaming website:
- Player Activity
The more bets the players make, the higher the GGR. Active players make the biggest difference.
- Game Type
Different games produce different percentages of GGR. Slot games usually produce higher revenue, while sports betting tends to have lower returns due to its unpredictable outcomes.
- Promotions and Bonuses
While bonuses attract new players, they can temporarily reduce GGR because the re-invested bonus money does not count as revenue.
- Market Requirements
Market regulations include taxes, regulating restrictions, and licensing. These things also impact GGR. Licensed markets require specific deductions, which slightly decreases the total GGR generated.
Why Should Affiliates Understand GGR
For affiliates understanding GGR is important to select the right partners for collaboration and predict long term earnings. It also allows them to:
- Compare programs fairly, since most of the programs use GGR based payments.
- Measure real performance rather than vanity metrics such as clicks or signups.
- Design marketing campaigns based on player groups generate higher GGR.
Understanding how GGR is calculated will help affiliates identify which offers are more profitable in long terms.
Conclusion
Understanding how GGR is calculated helps both affiliates and operators to make better decisions. It also reflects how profitable and sustainable your iGaming website is.