Net Gaming Revenue (NGR)

In the iGaming industry, Net Gaming Revenue(NGR) refers to the gross total of revenues, earned from gaming activities by an online bookmaker, minus all forms of cost and expenses accrued. It is key financial data that evaluates the profitability of online gambling operations.

Calculation:

• NGR is typically calculated as:
  • NGR = Total Gaming Revenue − Bonuses and Promotions − Player Withdrawals
  • Total gaming revenue is the sum of all bets placed by players, while bonus and promotion refers to the cost of incentives, provided by the house in order to retain and attract players.

Components:

• Total Gaming Revenue: Gross revenue before deductions, including all bets, minus payouts to players.
• Bonus and Promotion: Incentives to encourage players to participate, including welcome bonuses, free spins, and loyalty rewards.
• Player Wins: Cash paid out when winning players withdraw the funds.

Importance:

• NGR is one of the crucial indicators of an operator’s financial condition and operational performance. It reflects business profitability to stakeholders, including investors and management.
• It can be regarded as being commonly used in financial reporting and analysis for the purpose of monitoring growth, comparing results with competitors, and judging the efficiency of marketing campaigns.

Regulatory Considerations:

• Different jurisdictions may have specific regulations regarding how NGR is calculated and reported, impacting financial transparency and compliance for operators.

Impact of Bonuses:

• Operators must carefully manage bonuses and promotions to balance player acquisition and retention with profitability, as excessive promotions can significantly reduce NGR.