Why Are Key Performance Indicators Important to an Online Gambling Business? (2021 update)

Mar 22, 2021 Artyom Ustinov
Online and land-based casinos and other online gambling platforms use the same indicators to measure their success for a given time period. They are known as Key Performance Indicators (KPI), and they are essential when officials need to determine how to improve their respective businesses.

Therefore, if you’re interested in the way success is measured, read this short overview that’ll help you gain better insight into what happens behind the scene of the iGaming industry.

Gross Gaming Revenue

GGR is perhaps the most important financial indicator, and it shows how much money a gambling business earned over a certain period. All you have to do here is subtract the number of players’ winnings from the total amount of money made via bets on all games.

For example, if players made $5 million in bets and won $4 million in prizes, then GGR is $1 million.

profits

Net Gaming Revenue

GGR is not really an objective indicator of the profit made by a casino. That’s actually called Net Gaming Revenue (NGR) which displays the total revenue after all expenses, such as royalties or operating expenses, have been deducted.

Other Money-Oriented KPIs

Apart from GGR and NGR, there are two additional KPIs that casinos pay attention to.

NGR-to-Deposits

This indicator is actually a ratio that displays the amount of revenue created by deposits that patrons made during a certain time interval. The higher the values, the bigger the revenue. If the ratio is low, the casino may have seen a high rate of winners during that time.

Bets-to-Deposits

This indicator will display how much money from players deposits was actually wagered. If the values are low, it means that players lose money fast. High values indicate that players don’t lose money as fast as they should. If this ratio is out of the ordinary, it means that slots might have problems with their random number generators (technical/malfunction issues).

People-Oriented KPIs

Indicators related to past, current and future players are also important for businesses because these help them improve their operations.

Conversion Rate

The conversion rate simply indicates the number of people who have successfully completed the task you intended them to do in the first place.

In the context of online casinos, this could be the number of people who visited your casino through an ad, the number of people who registered on the platform, and the number of people who made their first deposit.

For example, your goal was to attract users to click on the ad and visit your site. A good conversion rate would mean that a lot of users actually did that. A bad indicator would mean that your ad was not that good and that you have to work on it attracting more players.

Life-Time Value

Life-time value (LTV) indicates the total amount of money a client deposits to your casino during the time they were active on the platform. The higher the LTV, the better.

Churn Rate

Churn rate indicates the number of players who stopped playing in your casino compared to the players that have remained active during a certain period of time. As a result, most casinos have the goal of lowering this rate at all times.

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Hybrid KPIs

Finally, there are some ‘hybrid’ KPIs pertaining to both finances and users.

Cost Per Acquisition

How much money do you need to spend in order to have a visitor open an account and make a deposit? Ideally, you want your cost per acquisition (CPA) to be as low as possible.

ARPU

ARPU stands for Average Revenue per User, and it simply indicates how much revenue a single casino games player brings to your iGaming business. This is calculated by dividing your GGR over a certain period with the number of users you had during that time.

Conclusion — You Want Automatization

Although some KPIs are more important than others, they are still very useful for forecasting your financial or marketing strategy. The good news is that many great casino software providers automated KPI calculations so that they can have insight into financial indicators whenever you want.

However, it’s up to you to process that information in the best possible way and create the most effective strategy to improve your casino operations, attract more users, get them to spend more money, and ultimately create more revenue.

Artyom Ustinov

Artyom is Head of White Label & Turnkey Solutions and has been working in complex B2B/B2C sales, as well as business development and management consulting in iGaming for more than 10 years.

Together with the Key Account Management Team, he has helped over 100 start-ups and experienced gaming companies to launch their projects with SoftGamings.

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