Understanding the Difference Between GGR and NGR

Every online casino must rely on concrete benchmarks to understand how well the business is performing. Key performance indicators (KPIs) are essential for tracking success, identifying problems, and guiding operational decisions. From revenue to user behavior, each KPI tells a story.

Let’s start with the most important indicators: Gross Gaming Revenue (GGR) and Net Gaming Revenue (NGR).

What Are KPIs and How Do They Work?

KPIs, or key performance indicators, are measurable values that help track business progress toward specific goals. If your online casino made $120,000 in GGR last quarter and you want to grow by 3%, your new goal is $123,600. Hitting $61,800 halfway through the quarter means you’re on track. But setting a KPI is only the beginning — you need a clear action plan to get there.

Let’s say your goal is to increase revenue. Will you enhance marketing, launch new bonuses, or redesign your user flow? Each action should tie directly into moving the needle on your KPIs.

GGR: Gross Gaming Revenue

Gross Gaming Revenue is the total money retained by the casino from player activity. It’s calculated by subtracting total payouts from total wagers.

Formula: GGR = Total Wagers (A) – Total Payouts (B)

For example, if BigBet Casino saw $37 million in player bets and paid out $23 million in winnings in 2022, GGR would be $14 million. GGR does not include bonuses, taxes, or fees. It’s a straightforward indicator of gameplay profitability.

Aggregator platforms can simplify provider contracts, reducing revenue-sharing complexity. Instead of signing multiple individual agreements (each possibly taking 5%+ of GGR), one contract with an aggregator can streamline game content access and reduce overhead.

Promotions like jackpots and free spins can boost GGR, but they must be carefully managed to avoid bonus abuse.

NGR: Net Gaming Revenue

NGR paints a fuller financial picture. It deducts bonuses, taxes, commissions, licensing fees, and other costs from GGR.

Formula: NGR = A – B – C – D

• A = Total Wagers
• B = Payouts
• C = Bonuses
• D = Taxes & Fees

Continuing our BigBet example: with $2 million in bonuses and $1.4 million in taxes, NGR becomes $10.6 million from a $14 million GGR.

NGR gives a clearer view of operational profit, which is why it’s often preferred for internal financial analysis.

Other Key Financial KPIs

• NGR-to-Deposits Ratio: Measures how much of the players’ deposits convert into real revenue. If too low, it may signal a weak game offering or poor retention strategy.
• Bets-to-Deposits Ratio: Assesses how actively players engage. Low ratios could suggest a poor UX or lackluster game variety.

These ratios help determine whether players are just depositing or truly engaging with the platform.

User Behavior KPIs

Not all performance metrics are about money. These KPIs reflect how users interact with your platform:

• Conversion Rate (Visitor to Signup): Indicates how appealing your site and promotions are.
• Signup to Deposit Conversion: Measures effectiveness of onboarding and initial bonus appeal.
• Retention Rate: Tracks how long players remain active over 3, 6, or 12 months.
• Churn Rate: Inverse of retention. High churn could signal a bonus abuse problem or lack of compelling content.

The best operators cross-reference player behavior (like withdrawal timing) with these metrics to identify high-risk users or design better loyalty paths.

Engagement KPIs

• Monthly Active Users (MAU) & Daily Active Users (DAU): Core indicators of your casino’s player base activity.
• Average Session Length: Longer sessions often correlate with better engagement. If time per session drops, your games may be stale or the UI unfriendly.

Tracking user sessions helps guide game refreshes, promotions, or redesigns.

Hybrid KPIs: Where Behavior Meets Revenue

• Cost Per Acquisition (CPA): The average cost to gain a new depositing player. Essential for budget control.
• Average Revenue Per User (ARPU): Total revenue divided by active users, useful for gauging profitability per player.
• Customer Lifetime Value (CLV): ARPU x average player lifespan. This is vital for long-term strategy.

Compare CLV with CPA to ensure marketing spend is sustainable. If you’re spending more to acquire users than they generate, the model needs adjustment.

FAQ: Understanding Online Casino KPIs

Q1: What is the most important KPI for online casinos?
A: GGR and NGR are foundational. Together, they help define both top-line performance and actual profitability.

Q2: How often should KPIs be reviewed?
A: Weekly reviews are best for operational KPIs (like MAU or session length), while monthly is more appropriate for financial metrics.

Q3: What’s a good churn rate?
A: It varies by market, but anything above 30% monthly may be cause for concern. Use retention strategies like VIP programs to counteract it.

Q4: Can GGR be high while NGR is low?
A: Yes. This usually means you’re spending too much on bonuses or fees. It’s a profitability red flag.

Q5: Why is CLV important?
A: It helps measure the long-term value of your players and compare it against acquisition costs, ensuring ROI on marketing campaigns.

Final Thoughts

Running a successful online casino requires much more than watching how much players deposit. You need a full 360-degree view of revenue generation, player behavior, acquisition cost, and retention. KPIs are the compass for your business — used properly, they’ll point you in the right direction and help you avoid costly missteps.

With a structured approach to evaluating GGR, NGR, and a suite of behavioral and hybrid KPIs, you can fine-tune your operations and set your online casino on the path to sustainable growth and success.