Gross Gambling Yield (GGY) or Gross Gaming Revenue (GGR) is one of the key performance indicators used in gambling business. In this article, you will learn what GGR depends on and how to determine its value.
The formula for calculating
GGR is a financial index that determines the gross revenues of a gambling institution. It is calculated as the difference between the total sum of all bets staked by the players (A) and the sum of all their wins (B).
Why is it so important to correctly understand the GGR? The fact is that the gambling taxation in many countries is charged as a percentage of GGR.
Many EU countries opt for the percentage of GGR because the total turnover of bets doesn't take into account all the peculiarities of different types of gambling. Under the same conditions, the taxes will be extremely high or the other way around for different operators.
Moreover, it concerns both online and land-based gambling establishments. The GGY can be implied as effectiveness measure in any kind of gambling, where there are a stake and a win. For example, in online casino games, lotteries, totalizers, bookmakers and so on.
When calculating the GGR, additional costs and taxes are not considered. The additional costs mean any other payments except payouts to the players. Those include staff salaries, equipment costs, website maintenance fees, etc.
GGR index shows the volume of sales or services rather than profit. If compare with a usual shop, GGY will indicate the sales revenue of the commercial enterprise and not its profit.
How bonuses affect casino GGY (GGR)
When calculating GGY, free bets or bonuses are taken into account only if the player has the right to choose money as a prize.
For example, the player makes the free (bonus) bet equivalent to $10. If he wins, he can get money. In case of loss, he loses the bet amount.
In this case, the amount of the bet made (A) is equal to zero for the gaming house. As if the player has deposited $0. And if the player didn't win, the sum of winnings (B) is also zero. But if the player has won and received, let's say, $20 – GGY from this transaction will be "-$20".
How loyalty programs are considered in GGR
Loyalty programs usually provide for the return of money to the players. It can be cashback, money refund on the VIP card, etc.
These payments are not a part of the transaction (bet) and refer to the additional costs.
For example, the sum of bets made by the player over the month is $100 (A). During that period, he won only $20 (B). However, according to the terms of the loyalty program, he received 10% of his losses back, which is $8. GGY from this player is as follows:
$100 - $20 = $80.
Since the cashback within the loyalty program is not deducted from GGY.
GGR is a dynamic value. It can change from month to month, from year to year, depending on the luck of the players.
Even if the number of players and the sum of the bets is the same in September and October, the gross gaming revenue of an online casino can be different, because the winnings in gambling are generated completely randomly.