Key Performance Indicators For Online Casinos

Although the online gambling industry is over 20 years old, the claim that it is at the forefront of the gambling industry is still relevant. The migration of traditional businesses to online is widespread and is de facto a necessity of our time. The high rate of Internet penetration and the constantly decreasing cost of connection contribute to the penetration of the gaming industry far beyond the boundaries of gambling zones and traditional land-based casinos.

In this regard, launching an online gaming project is an excellent opportunity to become part of a growing industry. Launching an online casino can be divided into two equally important parts: organizing infrastructure from a technical point of view and gaining recognition from players. Since we have already discussed the technical aspects of entering the market in other articles, here we will pay attention to the second component of a successful casino – particularly, methods for measuring the return on an online project.

Key Performance Indicators

Marketing is the most important word when it comes to turning an online casino into a profitable business. Marketing in gaming projects includes two related activities: attracting players (advertising, affiliate marketing, etc.) and retaining them (bonuses for loyal players, VIP programs, etc.).

A well-planned development strategy that pays equal attention to both areas of marketing is a desirable goal for any online casino. Methods may vary depending on the social, geographical and other characteristics of doing business. Still, the ultimate goal is always to attract the maximum number of players and maintain their interest for as long as possible. In the battle for the favour of players, casinos are using clever tactics coupled with severe investments, which leads to a critical question: how to measure the effectiveness of these strategies and the return on spending on promotions. Ultimately, marketing is not about mailings or bonuses but primarily about numbers. The need for more reliable monitoring of ongoing campaigns’ effectiveness is equivalent to moving unthinkingly.

Any business needs clear metrics that allow it to visualize the results of its work, analyze them, and use the findings for further development. Such metrics are called KPI (KPI). KPI is an abbreviation for the English Key Performance Indicators, which in Russian means “ key performance indicators .”

What KPIs most effectively reflect the features of online gambling?

In the world of online casinos, KPIs are based on two simple and clear areas: money and people.

Monetary KPIs

Financial indicators are pretty transparent and are responsible for the casino’s profitability.

Gross Gaming Revenue (GGR)

Gross Gaming Revenue (GGR) is one of the essential KPIs in the gambling business. The formula for calculating it is simple: the sum of all bets minus the sum of all winnings. This indicator reflects the amount remaining in the casino as a result of visitors’ playing but before any operating expenses of the project are paid. If we compare a GGR to a regular store, then GGR characterizes revenue but not profit.

It should be noted that the GGR value may vary from month to month, depending on the players’ luck. For example, even if the number of players and the amount of bets placed in July and August are the same, the GGR may still be different. Why? Because winnings in online casinos are generated randomly, and the actual results of the game may differ from the “theoretical” average return rate.

Net Gaming Revenue (NGR)

Net Gaming Revenue (NGR) reflects the casino’s profit, excluding all royalties and other operating expenses.

Such expenses can include bonuses (i.e., “drawn” money with which players also place bets), commissions of payment systems, deductions to game providers, payments to affiliate partners, fees for renewing a gaming license, taxes, etc.