11 Online Casino KPIs You Should Be Monitoring Right Now
“If you don’t know your numbers, you don’t know your business.”
Familiarizing oneself with key performance indicators (KPIs) is essential for every business owner aiming to boost their financial success.
Albert Einstein once said, “Not everything that can be counted counts and not everything that counts can be counted.”
In order to remain profitable and competitive, you need to understand the dynamics that make a business successful.
Surely enough, there are numbers worth knowing and numbers that don’t mean anything.
If you find yourself unsure of what key performance metrics to track for your online casino or lack knowledge about this topic, you’ve come to the right place.
In this article, we will guide you through the concept of key performance indicators, provide insights on how to effectively track them in your business, and identify the specific metrics that are crucial for the success of your online casino.
Key gambling industry KPIs
The important numbers for online casinos, like any business, are around:
- Acquiring new customers.
- Keeping them.
- Earning more from them.
Money-Related KPIs to Assess Your Business’s Financial Health
Gross Gaming Revenue (GGR)
Gross gaming revenue (GGR) is the most popular metric and you’ll often use it to judge the quality of different offers.
It’s simply the difference between all bets and withdrawals.
For example, if all your players bet ten million dollars in December and withdraw nine million, then your gross gaming revenue is one million dollars ($1,000,000). Easy!
You will use this metric often to evaluate deals you get from software providers and iGaming platforms
This offer from the iGaming platform provider simply means that you pay a 6% revenue share on your GGR for the Casino Module.
So if your GGR is one million dollars, the commission you pay is sixty thousand dollars.
Net Gaming Revenue (NGR)
Net Gaming Revenue metric plays a crucial role in making an online casino profitable by providing valuable insights into the financial performance of the gambling operation.
It represents the net revenue generated from all forms of gambling activities after deducting applicable taxes, bonuses, and promotional expenses.
Online Casino Example: Let’s say an online casino recorded the following figures:
NGR for the online casino: $1,200,000 – $900,000 – $10,000 – $12,000 – $30,000 – $15,000 = $233,000
How it’s one of the wildest key performance indicators?
1. By comparing NGRs to total player wagers, casinos can determine if they’re generating enough revenue to cover expenses and make a profit.
If all other variables remain the same, what revenue do you need to generate to stay profitable? You can find out over time by tracking NGR
2. Using the NGR, you can evaluate the performance of the different casino games. By analyzing the NGR for each game, casinos can identify the games that contribute the most to their revenue and profitability
If you discover games that lose your casino money on a regular basis, you can find out the reason why.
If necessary, you can remove the games with the worst results and develop marketing campaigns for the games that bring you the most profit.
3. By analyzing NGR along with operating costs, casinos can identify areas where expenses can be optimized to improve profitability
Your marketing campaigns, affiliates or other traffic sources can all be tracked and analyzed separately.
If some of your affiliates are constantly losing money for your online casino, it’s probably a good idea to cut them loose.
Bets-to-deposits
Another money-related KPI that provides valuable insights into the betting behavior and deposit patterns of players.
It simply shows if your players are active enough!
Let’s consider a period of one month. During this time, players made a total of $50,000 in bets, and the total amount of deposits made by players was $100,000.
To calculate the “Bets to Deposits” ratio, divide the total amount of bets by the total amount of deposits:
Bets to Deposits = Total Bets / Total Deposits
Bets to Deposits = $50,000 / $100,000 = 0.5
In this example, the “Bets to Deposits” ratio is 0.5, indicating that, on average, for every $1 deposited by players, $0.50 worth of bets were placed.
By analyzing this ratio, you can identify players who make frequent deposits but place relatively fewer bets. These players may need targeted promotions or incentives to encourage more betting activity.
If the ratio is low despite the availability of bonuses, it may indicate that the current bonus offerings are not enticing enough for players to utilize their deposits fully.
This is the problem and must be fixed by refining bonus structures.
The higher the ratio the better. The best case scenario is where they bet every dollar they deposit. In this case, the ratio is 1/1=1
If your ratio is below 0.8 you can try to fix that by running a promotion and measuring results.
NGR to deposits
The NGR to Deposits allows one to assess the profitability of a casino relative to the deposits made by players.
It measures the ratio between the NGR and the total deposits made by players.
The “Bets to Deposits” may not be enough to analyze the profitability of your business.
Let’s say your players bet every dollar they deposit. Your online casino could still lose money.
If you offer too many bonuses to get players to bet, your NGR will still be in the red.
If you sell a bottle of water for $2 and it costs you five dollars to sell it, it doesn’t matter if you sell a truck full of water. You’ll still lose money.
It’s wise to manage a healthy Bets to Deposits balance to ensure a good NGR to Deposit ratio.
Here is an Example:
Let’s say your player deposits a hundred dollars and makes zero bets. You make a targeted promotion to make him spend the balance.
You can spend ten dollars to make him bet eighty percent of his balance.
Or you can spend sixty dollars to make him bet his entire balance.
In the first case, your NGR-to-deposit ratio can be much better and ensure profits for your business.
People Related KPIs examine how well your interaction with your customers is
The “conversion” metric in the online casino industry measures how successful a casino is in turning potential customers or website visitors into active players who create accounts, deposit money, and participate in real-money gambling.
This metric is also called “cost per action” and allows you to track:
Visits to Registrations
The “visits to registration” conversion metric refers to the measurement of the rate at which website visitors convert into registered users.
This formula will give you the conversion rate for the “Visits to Registration” metric, which is the percentage of visitors who successfully complete the registration process.
So, for example, if one hundred people visit your website and five of them complete the registration, the conversion rate is five percent.
If the number is too low, online casinos lose money because they pay too much for each registration.
This happens a lot with Whitelabel platforms because
The key is to get this number as high as possible.
It’s pretty cheap to fix this metric for any online gambling business because it represents the people at the top of your funnel – signups are the cheapest metric to achieve.
For example, if there is a high drop-off rate when filling out the form, simplifying the form or reducing the number of required fields can help increase conversion.
Registrations to Deposits
This is where the rubber meets the road. The “Registrations to Deposits” metric represents the first money for any online gambling business.
This is the rate at which registered users or players make their first deposits after completing the registration process. It indicates the effectiveness of the casino’s onboarding process and the level of trust and engagement it has established with its players.
This is a very important metric for any online casino business because it shows the ability to convert people into paying customers at a profitable rate.
A higher conversion rate signifies a higher level of user trust and confidence in the casino’s offerings, leading to increased revenue.
Knowing the “registrations to deposits” metric allows an online casino to design promotional offers and bonus strategies so that registered users have the incentive to make their first deposits.
Imagine you have a lot of signups, but no deposits. This is a clear sign that either people don’t like your offer, they don’t have a convenient way to make a first deposit, or they just don’t trust you.
If you get your traffic from multiple sources, you can use data to focus on the most successful channels and optimize your marketing efforts to generate higher revenue.
You can analyze user feedback, run tests, and make data-driven design improvements to optimize your casino website.
Customer Lifetime Value (LTV or CLV)
Customer lifetime value (CLV) is a metric that measures the total revenue a company can expect to receive from an individual customer over the course of their lifetime.
LTV = (Average Revenue per User ) x (Average Lifespan of a User)
To calculate the average revenue per user, you add up the revenue of all users in a given period and divide it by the total number of users.
The average lifetime of a user refers to the amount of time a user remains active and connected to the online casino. It can be measured in months, years, or any other relevant time unit.
Why is it important to know the LTV?
Because players with a high LTV value can be targeted with exclusive promotions or VIP programs to encourage them to continue playing and depositing.
Your VIPs will receive special perks and benefits to strengthen their loyalty. They’ll be the biggest part of your profit and that is why you need to know each of them.
It also helps to identify players who are at risk of churning or dropping out.
Imagine that the average lifetime value is five hundred dollars. You can send personalized rewards, special bonuses, or loyalty schemes to any player who reaches that goal and then stops playing.
Churn rate
When we talk about the “churn rate” of online casinos, we’re essentially referring to how many players are leaving the casino over a given period of time.
A high churn rate means that a lot of people are leaving the casino, which could be a sign that players aren’t finding the casino’s games or services to be enjoyable or engaging enough.
You can use both the Churn rate and the Customer Lifetime Value to better predict when it’s time to send special promotions or offers to incentivize them to stay.
For example, let’s say that a casino had 1000 players at the beginning of the month, and 150 of those players stopped playing by the end of the month.
Churn rate = (150 / 1000) x 100
Churn rate = 15%
This would mean that the casino had a churn rate of 15% for that month.
Monthly Active Users (MAU)
Total unique users who have interacted with the casino platform during a specific month.
The MAU metric is essential for online casinos as it helps measure the success of user acquisition and retention strategies.
For example, if an online casino has 10,000 monthly active users in a given month, it indicates a strong level of player engagement and suggests that the casino is attracting and retaining a significant number of users.
It’s important to note that the definition of what constitutes an active user may vary depending on the specific casino and its objectives. Some casinos may consider users who have made at least one deposit as active users, while others may require users to engage in additional activities to be considered active.
Hybrid KPIs reflect both human behavior and financial impact
Average Revenue Per User (ARPU)
ARPU is a metric that measures how much revenue a business generates per user on average. This KPI is important for gaming businesses because it allows them to identify which users are most valuable to their business and which products and services generate the most revenue.
For example, let’s say an online casino generated $100,000 in revenue in a month, and it had 500 active users during the same period.
Using the formula:
ARPU = $100,000 / 500 ARPU = $200
In this case, the ARPU for the online casino would be $200. This means that each active user contributed an average of $200 to the total revenue that month.
You can use this metric in many cases to increase the profitability of your online casino:
Step One: Identify player segments with lower spending and design targeted promotions to incentivize higher deposits.
Step Two: Offer deposit bonuses or free spins to these segments to increase to encourage them to increase their spending.
Step Three: Compare your ARPU before and after this promotion. Repeat the process.
ARPU analysis helps identify popular games or content that contribute significantly to revenue. Casinos can focus on optimizing these offerings, introducing new game variants, or collaborating with renowned software providers to attract high-spending players.
Cost Per Acquisition (CPA)
Cost Per Acquisition refers to the amount of money a business spends to acquire a new customer.
Sometimes CPA is referred to as cost per action, which then requires additional explanation as to whether it’s a registration or initial deposit.
Arguably, this is the most important metric!
Since different marketing channels, such as email marketing and social media advertising, can also deliver different results, it’s important to track CPA per channel along with other key metrics – ARPU and NGR.
For example:
The cost per acquisition for your social media traffic can be $50,00.
The cost per acquisition for your affiliate traffic can be $170,00
The only way to find out which channel delivers the better results is to look at other metrics such as NGR, ARPU, LTV
It may be that the cheapest traffic source generates a negative NGR and has a low LTV because none of the customers make a deposit.
With time, you’ll know exactly what CPA you’re willing to pay for the different marketing channels.
Conclusion
It’s not just about tracking your online casino KPIs. To run a successful online casino, you need to know how different metrics affect casino performance.
To make data-driven decisions, you need to learn to combine different metrics to understand what’s going on.
In this article, we have discussed the most important money, people, and hybrid key performance indicators.
Online casino marketers and entrepreneurs use this data to improve their marketing strategies, enhance user experience and increase profits.
Now you can make data-driven decisions and identify which areas of your operation need improvement and take the necessary steps to be successful.
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