Essential KPI’s for online casinos
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 businesses use Key Performance Indicators (KPI’s) to measure the health of their business.
As with any other business, there is no single, magic formula for how to run an online casino. The KPI’s detailed below provide a series of metrics that allow you to measure your casino’s importance, but that doesn’t mean there’s a golden ratio that unlocks success. You’ll have to carefully track them over time, making adjustments to your business model and charting the effects of the changes you make.
Tracking online casino KPI’s like GGR, NGR, Average Revenue Per User, NGR-to-Deposits, Bets-to-Deposits, Lifetime Value, and Churn Rate will give you milestones to measure your progress by — and help you plan your next steps.
Keep reading for a look at some of the most commonly used — and most useful — online casino KPI’s.
The bottom line is a good place to start. These KPI’s will help you take a cold, hard look at your balance sheet.
Gross Gaming Revenue (GGR)
Gross Gaming Revenue is, on its face, a simple metric: the amount players wagered minus the amount they won. However, GGR does not account for payouts such as bonuses. For example, if throughout a year players wager a total of $3 million and win a total of $2.5 million, the casino platform’s GGR for that year is $500,000, but this number excludes the value of sign-up and deposit bonuses. GGR = A-B, where A is a total amount of all bets placed by players, and B is the sum of all payments to players.
GGR is a pure measurement of the results of the game. It shows how much the casino won — or how much players lost — over a given time period.
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.
Net Gaming Revenue (NGR)
Net Gaming Revenue (NGR) is Gross Gaming Revenue minus bonuses, chargebacks, commissions paid to payment system providers and 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 = A-B-C-D, where A is a total amount of all bets placed by players, and B is the sum of all payments to players, C is the sum of all bonuses received by players, and D is the total of all taxes.
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.
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.
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 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.
From marketing and advertising and running to how long their loyalty lasts, these KPI’s are used to examine how users are interacting with your platform.
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, the number of people who saw an ad compared to the number of people who clicked on it, or the number of people who received an email with a CTA in it and the number who clicked on it.
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, it could be time for a 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. For example, 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 preferences for casino games and sports betting, have their own budgets, and respond differently to promotion campaigns.
Churn rate is the number of players who leave your platform. Analyzing churn rate will have serious implications. Tracking how long players stay on your platform 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 or enhanced performance by existing competitors, 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.
It’s cheaper to keep a player than to find a new one. Successful casinos find ways to turn casual, one-off visitors into loyal, long-term players. There are a few ways to improve retention rate. VIP and loyalty programs give the casino a value in players’ eyes that increases over time. With VIP programs, players earn perks, rewards, and improved personal customer service as they demonstrate their loyalty with sizable, consistent deposits.
Aside from loyalty and VIP programs, there are a number of other actions that online casinos can take in order 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 catalogue 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.
The online casino KPI’s in this section relate to both user behavior and its financial implications.
Cost Per Acquisition
Cost Per Acquisition (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, or how much a player loses, 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.
As CLV depends on both ARPU and retention, you should look at both how much players are spending and how long they’re staying on your platform if it seems that CLV is slipping.
It’s critical to track, break down, 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 nearly a decade of experience launching successful online casino and sportsbook projects, Slotegrator knows the iGaming business inside and out. Our Turnkey solution comes with built-in reporting tools to track, segment, analyze, and optimize your business performance.
Reach out to our sales staff for a free consultation and find out what our platform software can do for you.