GGR, NGR, Admin Fee: Explained

When calculating economic viability, casinos and bookmakers focus on three key parameters: NGR, Admin Fee, and GGR. Let's break down each one.

If you're running traffic to gambling offers, remember that your earnings directly depend on the casino's profits. Your income isn't solely derived from player losses; it also accounts for various expenses, which beginners often overlook.

To understand how payouts are formed, it's crucial for webmasters to grasp the concept of NGR, its functions, and how it differs from GGR. This knowledge empowers you to navigate the gambling landscape with confidence and provides foundational understanding of casino operations.

What is GGR?

When placing bets or spinning slots, players have a chance to win and increase their funds. If a player wins and withdraws their winnings, the advertiser loses potential income. Conversely, if the player loses, the advertiser profits.

GGR represents the difference between the total sum of all deposits made and winnings paid out.

GGR (Gross Gaming Revenue) is the total revenue generated from gambling activities, calculated by subtracting the sum of payouts to players from the total sum of bets placed. This metric is used to determine the advertiser's income in both gambling and betting.

The Relationship between NGR and Admin Fee

To calculate the advertiser's net profit (NGR), we need to consider both the gross revenue (GGR) and administrative expenses (Admin Fee). These metrics are combined in a simple equation:

NGR = GGR - Admin Fee

NGR

Net Gaming Revenue represents the casino's net profit after deducting various expenses such as player bonuses, developer royalties, and commissions. This parameter is applied in the gambling vertical to track the profitability of a casino or a specific traffic stream.

Two indicators are used to assess a casino's performance: GGR and NGR.

While GGR reflects solely the revenue (the difference between player bets and their winnings), NGR provides a more accurate assessment of the actual profit, taking into account all expenses.

NGR helps determine the proportion of net profit consumed by various expenses and the actual income generated by slots and other games. This information allows for adjustments to be made in terms of cooperation with affiliates, bonus structures, and the availability of specific slots.

NGR reflects the casino's income and evaluates the affiliate's performance. Each new user stream has its own NGR. The higher this indicator, the better the quality of the traffic is considered.

When working in gambling, an affiliate chooses a payment model: CPA, RevShare, or the less common Hybrid. RevShare is a model where the affiliate receives a percentage of the attracted users' spending. If an affiliate working on a 50% RevShare brings in a player who loses $1000, the webmaster won't receive $500, but less, because Admin fees are deducted from the $1000.

Payout = NGR x 0.5

The amount the casino earns after all deductions is the NGR. This indicator determines the conditions offered by the advertiser to affiliate networks and individual affiliates.

A solo affiliate, a team, or an affiliate network can request the NGR data from the advertiser to evaluate the profitability of their traffic streams. However, not all advertisers are willing to share this information. A high NGR for a particular webmaster can be a basis for requesting a higher CPA rate or an increased RevShare percentage. However, the difficulty lies in the fact that even after receiving the NGR value, the affiliate might not always be able to assess its significance accurately. To better navigate these metrics, experience in working with offers in the gambling vertical is essential.

Admin Fee

Admin Fee refers to the expenses associated with running a casino. This includes:

• Commissions to gaming providers
• Payment system fees
• Salaries of platform administrators and moderators
• Losses from currency conversions
• Call center and retention department costs
• Bonuses for active users

These expenses directly impact the casino's net profit and are factored into affiliate payouts. Regardless of the payment model, both the affiliate and the affiliate network need to consider these expenses when calculating their potential earnings.

The issue with admin fees lies in the lack of transparency regarding its specific components. Each affiliate network calculates admin fees differently and includes various expenses. Consequently, working with one affiliate network offering 30% RevShare might be more profitable than another offering 50% RS. To understand your actual profit percentage, it's essential to communicate with your personal manager.

Moreover, there's a prevailing opinion within the community that admin fees aren't solely about casino expenses but also a form of hidden shaving. The fairness of admin fee deductions is a frequent topic of discussion in online communities. As there's no definitive answer regarding its exact composition and the percentage of revenue it consumes, suspicions arise that these funds are pocketed by the affiliate network or the advertiser.

Conclusion

In affiliate marketing, understanding key performance indicators (NGR, Admin Fee, and GGR) is crucial for success. They provide valuable insights into the casino's actual profits and expenses, enabling affiliates to optimize their cooperation terms.

GGR (gross gaming revenue) reveals the difference between the total amount wagered and winnings paid out, serving as the primary indicator of the advertiser's income. NGR (net gaming revenue) accounts for all expenses, including bonuses, royalties, and commissions, reflecting the casino's true profitability. Administrative expenses (Admin Fee) encompass costs related to bonuses, commissions, and maintenance, directly impacting the casino's net profit.

Understanding these metrics empowers affiliates to confidently navigate the gambling niche, effectively manage campaigns, and achieve maximum profitability. Regardless of the chosen payment model (CPA, RevShare, or Hybrid), understanding the payment structure and factors influencing profits is key to succeeding in gambling affiliate marketing.