What Online Casino Revenues Depend on: Key Factors and Examples of Formulas

The gambling industry is actively developing and changing. Achievements in the IT sphere have improved the quality of entertainment and services. Today, content can be launched on any device with Internet access. Modern gaming products attract punters with bright graphics, exciting mechanics, and interesting plots.

Shifts in the regulation of the industry also facilitate the increase in the popularity of online casinos. The governments of many countries contribute to the emergence of new amusement platforms and audience growth.

Many entrepreneurs are considering launching niche projects. For successful work, it is important to understand how revenue is generated and how to calculate it correctly.

Rosloto specialists offer a detailed article that describes the income and expenses of iGaming portals. Our consultants will provide qualified assistance in preparing a business plan.

Online Casino Finances

Let us take a closer look at how gambling platforms generate profits and costs.

Factors Affecting Revenue

An operator needs to find a balance between earning money and user satisfaction.

To reach this harmony, several features should be considered:

1. Assortment of entertainment. It is necessary to take into account the diversity of the potential audience’s preferences. In addition to classic fruit slots, the website should have card and table products, crash games, and multi-user solutions. Live broadcasts, as well as VR and AR content, are at the peak of popularity.
2. Region of operation. User tastes depend on the country. For instance, Europeans prefer slots, Latin Americans choose poker, and the Asian audience often picks mahjong and Sic Bo. The visual design and musical accompaniment of the games should correspond to local traditions.
3. Payment systems. It is recommended to connect as many financial gateways as possible, guaranteeing fast transfers for punters when making deposits and withdrawing prizes. If participants experience transaction issues, they will leave the platform and never return.
4. Increasing gambler loyalty. To strengthen audience trust, personalised offers, extra bonuses, and reward systems, based on time spent on the portal or bet volume, are often used. They motivate fans to place wagers more often.
5. Crossplatformity of the project. It is important to provide gamers with the opportunity to visit the online casino from any device without having to create new accounts.
6. High level of security. Visitors should be confident in the reliability of the portal and the safety of funds and personal data. Modern encryption methods guarantee protection from unauthorised actions and fraud.
7. Availability of a licence. Experienced gamblers prefer legal online casinos. A certificate from a leading jurisdiction is a guarantee of business honesty and transparency.

These factors contribute to the growth in attendance of the entertainment platform, which has a positive effect on the income level.

Main Expense Items

Key costs of an online casino:

1. Fees for games. Content providers usually take a certain percentage of net profit from the software.
2. Payment of wages. A project cannot work without specialists. It is impossible to cover all the activities independently. Administrators, consultants, accountants, programmers, marketers, and other qualified employees are needed.
3. Support for platform operation. These are monthly expenses for hosting, domain name, and software maintenance.
4. Payment of taxes and fiscal fees. Without them, legal business is impossible. The size of charges depends on the region.
5. Marketing activities. Various tools are used to promote the project: affiliate networks, SEO, SMM, etc. Each of the areas requires financial investments. With a competent advertising campaign, you can quickly recoup the funds.
6. Retention programs. These are bonuses, additional rewards, and incentives, the purpose of which is to motivate gamblers to return to the platforms and play more often.

Risks in Online Casino Management

The gambling market is dynamic and highly competitive. New projects regularly appear, competing with each other for visitors. Operators need to make well-thought-out efforts to keep their positions.

Certain risks also add challenges. Let us review them:

Operating Expenses

The category of costs includes:

• licensing;
• business promotion;
• periodic catalogue updates, etc.

These expenditures are not constant. Their size may change, which affects the overall profitability of the platform.

Legal Component

The rules of the iGaming vertical are complex. They vary significantly depending on the jurisdiction and region of operation.

Entrepreneurs need to constantly monitor the regulatory framework to respond to possible changes promptly and avoid penalties. Professional lawyers who stay tuned to the niche news can help with the task.

Platform Protection

Online gambling attracts fraudsters seeking to steal funds and personal data of gamblers. Hackers can cause not only financial, but also reputational losses.

It is better not to save on cybersecurity and instead, integrate reliable software that detects different scams and effectively combat the following:

• bonus abuse;
• multi-accounting;
• fraudulent attempts, etc.

Investments in protection systems will save money and enhance customer trust in the platform.

Profitability Indicators: Calculation Formulas

We provide several of the most important metrics that can be used to define the efficiency of a gambling portal.

Return-to-Player Percentage

RTP is a figure that shows how much investment in a particular game is sent back to gamblers in the form of rewards. It is somehow similar to cashback.

Here are the characteristics of the parameter:

• 95% is an average indicator;
• 91% or less is a low coefficient;
• 98% or more is considered a high metric.

The value affects the frequency of player winnings. However, it is impossible to accurately calculate which spin will be successful, because the operation of slots is based on a random number generator. Prize payouts directly depend on the volatility level: it is the ratio between the periodicity of wins and the amount of rewards.

The vast majority of gaming products return 90–99.5% to gambling enthusiasts. The indicator is called the total amount of winnings.

To calculate RTP, the following formula is used:

RTP = (Total amount of winnings / Total bet volume) x 100%

Hold and Margin

The first category shows the difference between the wagers made by punters and the prize payouts. The final amount goes to the operator.

The formula is as follows:

Hold = Total bet volume - Total amount of winnings

The ratio of this metric to all player stakes, expressed as a percentage, is called margin.

The parameter is calculated in this way:

Margin = (Hold / Total bet volume) x 100%

Earnings of a Gambling Platform

The final profitability of an online casino is directly affected by the entrepreneur’s expenses. The amounts depend on the project’s features and the size of mandatory regular payments. Let us start with determining gross gaming revenue. It shows the effectiveness of interaction with clients.

The easiest way to calculate the indicator:

GGR = Total bet volume - Total amount of win payouts

There is another way to determine this essential metric. It is used in cases where the jurisdiction allows deducting the amount of audience incentives from tax contributions.

The formula is as follows:

GGR = Hold - Bonuses provided to clients

Some operators involve accountants in the calculations. These experts help avoid inaccuracies and control all monetary indicators.

Specialists usually use the following model:

GGR = Balance at the beginning of the reporting period + Player deposits - Withdrawn money - Balance at the end of the reporting period

Estimation of Net Revenue

This important figure depends on the entrepreneur’s expenses. It is necessary to plan all costs in detail (for project maintenance, software purchase, marketing campaign financing, etc.).

The following calculations are used:

NGR = Total bet volume - Platform maintenance spending - Total amount of winnings

This formula is generalised. Each online casino has a unique list of expenditures. When measuring profitability, it is necessary to focus on individual financial indicators that are common for a particular website.

The Main Things About Online Casino Revenues

To assess the success of a gaming platform, it is better to consider the following factors:

• Features of cash receipts formation. Various aspects influence the profitability of gambling portals: the range of entertainment, the region of operation, the level of security, and the choice of payment systems.
• Main expense items. These include the commission for the use of software, tax collection, employee salaries, and support for the platform functionality.

For accurate calculations, various metrics are used, including the RTP percentage, GGR, and NGR of the online casino.

Feel free to contact Rosloto’s consultants for help with financial reporting and similar tasks. You can order accounting and legal support for your gambling platform from the company’s team.

The list of our services includes the development of a turnkey casino business, launching a gaming startup under the White Label program, integrating content from well-known providers, etc.