To run a successful business, it is not enough to only have a full understanding of what iGaming is all about. It is important to realize that online casino is a specific branch of business. To assess how effective and successful a gaming establishment is, the following indicators are used:
- GGR. Denotes the amount of revenue.
- NGR. Assumes the amount of net income received.
To understand the difference between these values, it is important to look at each one separately.
What is NGR
NGR shows the net profit that a gaming establishment makes minus existing costs:
- Payments to affiliate programs.
- Payment of taxes.
- Bonus payments.
- Payments for the purchase of licensed software.
It is a crucial indicator that helps to control the level of costs, expenses and the amount of profit. Net profit shows how profitable a gaming establishment is and what business strategies can be used to increase NGR.
What is GGR in the gaming industry
The GGR value is calculated as the difference between the net profit (total amount of bets — amount of winning bets). In some cases, the indicator can reach gigantic sizes. For example, in 2006 the GGR amounted to 90 billion dollars.
The London ICE conference often discusses issues concerning these indicators, various statistical data are given. As a result, it was proved that the gaming business often contributes to the rise of the country’s economy. This trend is characteristic of both online and land-based casinos.
How do the indicators differ
GGR is an indicator that directly depends on the «luck» of the player. NGR is an operational method that allows you to reliably calculate the net profit of the establishment. But in the first case, it is enough to use a static formula for calculation (GGR = A — B). As for the second indicator, it changes depending on the emerging situation in the market and other aspects. For those who plan to open their own online casino, it is also worth studying what is rake in gambling.