Key economic indicators of casino operation – how are GGR and NGR calculated?

In the gambling business, the efficiency of a casino is usually assessed by two indicators. The first of these is GGR, or gross game income. The second indicator is called NGR (Net Gaming Revenue) and allows you to quickly assess the level of profit of a gambling establishment or online service.

What is NGR?

Another name for this indicator is net gaming income. It reflects the level of profit taking into account most items of expenses. These include the percentage paid to the creators of software (game slots), various bonuses for casino visitors, payments of commissions to payment systems, as well as taxes paid to the state budget.

NGR helps to quickly assess the effectiveness of both online casinos and land-based establishments. Therefore, Net Gaming Revenue is used as a kind of express assessment of the quality of the institution’s work. It allows you to most accurately determine the prospects of the enterprise in the short and medium term. At the same time, in different states, the methods for calculating the net gaming income will differ depending on the peculiarities of the country’s legislation.

Net Gaming Revenue is calculated not only for individual casinos or web pages, but also for companies, entire gambling zones, states or even countries. For example, statistics from 2016 showed that for the first time this decade, net gaming income grew in Atlantic City.

What is gross gaming income?

Gross Gaming Revenue, also known as gross gaming income, is determined by the difference between two values ​​- all bets made at the casino and payments to those whose bets have won. This does not take into account tax deductions, various bonus programs to attract players, staff costs and organization of show programs and other expenses. Therefore, the GGR sometimes seems to be just huge. For example, in 2006, the total US gross gaming income reached $ 90 billion.

Since many expenses are not taken into account when calculating Gross Gaming Revenue, many begin to perceive such large amounts as an unacceptable amount of losses of casino visitors. But we must not forget that these incomes are simply redistributed through the casino.

So, in the United Kingdom alone, about 100 thousand people work in gambling establishments. At the expense of their salaries, they feed not only themselves, but also their families. At the same time, the rich lose more in casinos, who do not count their money, and not the poor, so gambling establishments equalize social income by transferring money from tighter wallets into the hands of ordinary citizens.

We must not forget about where the taxes paid by gambling establishments are spent. Basically, with their help, the infrastructure of cities is being developed: roads, schools and hospitals are being built, cultural heritage sites are being restored. Interestingly, in some regions, casino revenues account for the lion’s share of the region’s revenues. For example, in Macau, about 45% of budget revenues come from gambling establishments. As a result, this Chinese region has one of the highest living standards in the world.

How do NGR and GGR differ from each other?

The GGR indicator helps to determine the revenue of an establishment, that is, its scale, but not the degree of efficiency, that is, profitability. A huge เว็บคาสิโนสด casino can have a large GGR, but at the same time a negative Net Gaming Revenue value, which means it is operating at a loss. NGR is just the most suitable for assessing the effectiveness of the organization of the gambling business. In simple terms, NGR measures the profitability of a business, and GGR measures its scope.

It is easy to see that GGR does not depend in any way on taxation and state laws in the field of gambling.

Net gaming income is calculated using the formula:

NGR = A – B – C – D = GGR – C – D,

  • where C is the cost of bonus programs for players;
  • D – tax payments to the state budget.

It can be seen that NGR depends on the country in which either the real gambling establishment is located or the online casino is registered. Also, the marketing costs associated with bonus payments to players affect the net game income. It is also worth noting that the NGR is always less than the gross gaming income.

Be the first to comment on "Key economic indicators of casino operation – how are GGR and NGR calculated?"

Leave a comment

Your email address will not be published.