Online casino performance indicators: main difference between GGR and NGR

Casino operators are constantly analyzing and improving KPIs like GGR and NGR. How do the two compare, and how are they different from other measurements of revenue? Here you’ll find the answers to your questions — and more. 

GGR and NGR are the two most common key performance indicators, or KPIs, used in the iGaming industry. Here we’ll cover what GGR and NGR measure, the key differences between the two, and why understanding GGR is critical for your business. 

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. Increased sales often flows 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?

GGR stands for gross gaming revenue. It’s 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: A - B = GGR

Where:

A = total amount wagered 

B = total amount paid out

It’s simple enough. Gross gaming revenue is simply the amount of money that was transferred during gameplay from the players to the casino. 

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. 

GGR is the most common basis for taxation and for the payment of service fees to game providers. 

This is a choke point/bottleneck 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. 

However, it’s very rare to only offer games from a single developer. Players like to know they have options at their disposal. 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. 

You can learn more about our game aggregator solution here.

What is NGR?

Net gaming revenue takes a few more factors into account

More than just player wagers minus player losses, NGR also accounts for player bonuses and taxes paid on gaming revenue

GGR tax is a common part of iGaming regulations 

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

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, 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 is a pure measurement of the 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.

Other KPIs

GGR and NGR are just the beginning of a long list of KPIs that online casinos use to measure their performance.

There’s also cost per acquisition, or CPA. This measures how much money, on average, the casino spends in order to add a new player to its base. CPA is important when evaluating the effectiveness of your marketing strategy. 

There are also KPIs that compare multiple figures, such as bets-to-deposits, and ones that zero in on different stages of conversion (from impressions to visitors to signups to deposits), as well as tracking customer behavior like retention and churn rates. 

You can find a more comprehensive list of online casino KPIs here. 

Slotegrator’s turnkey online casino platform has a Business Intelligence module that delivers real-time analytics you can use to segment users and track important KPIs. Learn more here. 

Other financial 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.