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Essential KPIs to Elevate Your Online Casino Business

Last updated Apr 11, 2024
Apr 11, 2024 Uncategorized

The competitive world of online casinos thrives on data-driven strategies, where Key Performance Indicators (KPIs) play a crucial role in informing decisions to thrive in the industry. From attracting players to retaining them, understanding and improving these metrics can make a substantial difference to an online casino’s success.

Let’s break down the key KPIs that can give online casino operators actionable insights, drive strategic improvements, and lead to increased revenue.

Determining the key performance indicator

There are probably hundreds of different KPIs that any business can analyze to either make data-driven decisions, analyze the health of the business, measure progress, or analyze trends.

It can be overwhelming to analyze all possible KPIs. If you have too many KPIs to track, you can lose focus and energy on irrelevant metrics.

As your business grows, you will need to keep an eye on more different metrics. The reasons for this are simple – your team will grow and you will have more data, giving you endless angles to look at.

In this article, we’ll take a look at the most important metrics from a business owner’s perspective. Most of the metrics listed here are tracked by affiliate managers who are responsible for traffic acquisition, budget, and profitability. Every business owner should be aware of these metrics to ensure the performance and growth of their business.

Lifetime customer value in the iGaming industry (and a real case study)

Customer Lifetime Value (LTV) is an important metric for any business, and online casinos are no exception.

Why is LTV so important for online casinos? It provides insight into how much revenue each player generates throughout their time as a customer. This information can help inform decisions about marketing spend, player retention initiatives, and overall business strategy.

If you want to know the Lifetime value of your clients without using special tools then you have some work to do!

LTV = total gross gaming revenue of a site / total number of ACTIVE players

Lifetime Value Online Casino

This formula can be misleading if you don’t understand the difference between your players:

  • They can be players who have simply registered on your site and never made a deposit (dormant players).
  • They can be players who come from different sources such as SEO, PPC, and others. And the LTV for each traffic source can be very different.
  • They can play on your site for years or make just one bet and then disappear.

Why is this important at all? Let’s take a look at this case study. It represents the reality of a customer acquisition process:

Case study: A group of players who came to an online casino through the marketing team’s SEO efforts have an LTV of 200 EUR. The owner of the online casino decided to buy PPC traffic based on this value and paid 70 EUR for each depositor. He spent a considerable part of his marketing budget but never made a profit. In his case, he made the wrong decision because he assumed that PPC traffic would generate the same LTV. He forgot to divide his players into different cohorts based on traffic channels. In reality, the LTV for new players could be as low as EUR 120.

Online Casino Customer Acquisition

KPIs only make sense if they tell the whole story. That’s why it’s important to not only calculate the LTV but to have a goal in mind for which you need this metric.

How to find the LTV for your online casino

Want to find out the LTV of all users who registered in January and only came through SEO measures? It’s May now, so let’s understand our LTV for the last five months.

Take player A and check his earnings from his registration to his last activity. Let’s say it’s 1,000 EUR and he was active for 4 months.

Take player B and check his earnings from his registration to his last activity. Let’s say it’s 500 EUR and he’s been active for 5 months.

Now you need to subtract the winnings for this period to determine the gross value added.

  • Although player A deposited EUR 1,000, he withdrew EUR 600. The GGR he generated was EUR 400
  • Although player B deposited EUR 500, he withdrew EUR 200. The gross amounts of this player amounted to 300 EUR

The average lifetime value (LTV) of the players in this group is 700 EUR / 2 = 350 EUR

It only makes sense to calculate the LTV if you have a specific problem you’re trying to solve and create separate cohorts for different groups of people you want to divide into these cohorts.

online casino kpi - player segmentation

There can be a dozen different cohorts and LTVs that you calculate continuously.

Large online casinos and sports betting sites use data and business intelligence tools that can instantly calculate the LTV for different groups of players.

The most popular tools are Metabase, PowerBI and Microstrategy. These tools can help create a story for many KPIs and look at things from many different angles.

Online Casino Analytics

How to improve customer lifetime value?

This is quite a difficult task and may require significant improvements in various aspects of your online casino. To be successful, you need to get your hands dirty, talk to your customers, conduct surveys, and measure various proxy metrics that will allow you to make data-driven decisions! You want to improve these key aspects of your business:

  • Offer games that people want to play (and not the games you like)

If you target the Indian market and only offer people games that are popular in the Chinese market, you won’t be able to retain Indian customers. They are not interested in these types of games. In practice, there are between 15 and 30 software providers that are very suitable for individual markets. Make sure you have them all and add software providers that offer games specifically for your target group.

Most entrepreneurs wrongly assume that people play games that they themselves like. This couldn’t be further from the truth. Only the market decides which games they want to play, and your job is to understand and deliver that list.

  • Bonuses and discounts

In this case, we’re talking about bonuses and Discounts that will keep players coming back to your casino. VIP bonuses, reload bonuses, match deposit bonuses, and others. Make sure you have a strong bonus program for your market.

  • Customer support should have an A++ rating

Don’t even think about using AI. If you want your players to stick around, they need to talk to a real human and get a quick response. Get metrics from your software dashboard and analyze every metric you can find. Try to understand not only the efficiency of your customer support but also the satisfaction of your customers. Even if you’re effective enough, it doesn’t mean your customers are happy.

  • Stay transparent because people love honesty

Hide nothing from your players. Always be clear in your terms and conditions so that your customers understand exactly what your gambling site is offering. And provide good customer support to back up this information when needed. This will help you maintain a good reputation, which will have a positive long-term impact on your business performance.

Registration of new players

The number of new players who register on your online casino platform is an important indicator of growth and success. It is essential to track this metric over time to identify trends, such as an increase or decrease in new player registrations.

In addition, analyzing the demographics and behavior of new players can provide valuable insights for targeted marketing campaigns and improving the overall user experience.

How does tracking new players help to understand the profitability of online casinos?

You track the new registrations every month and can thus record the trend. If your marketing budget remains the same during these months and the number of registrations decreases (as in this example), then you end up paying more for each registration.

As in this example – in February, this online casino received 1455 sign-ups and paid EUR 115,919.77 for them. That’s 94.94 EUR per registration.

In March, there were only 780 registrations, for which it spent 93,764.20 EUR. That is EUR 135.30 per registration. This corresponds to 42% higher costs. If these costs aren’t justifiable, you may be bleeding cash.

In this case, the company spent three times more money in March than it took in. It is important to note that information on the net revenue and the amount of commissions paid in marketing is not sufficient to assess the profitability of this company. The owners may want to recoup the investment in the coming months as they have invested heavily in CPA deals.

The level of player retention

Picture this: 1888 active players on your casino platform in January, but only 938 in March. You have retained 938 people or 50% of the database. This KPI tells you whether players love your online casino or whether you need to improve your customer retention. Or both.

Start by solving this problem with the obvious. Do you have a well-configured CRM system? If not, then you’re missing one of the most important parts of your business! In this post, we share how to increase a customer retention rate at your online casino or sports betting site.

Online Casino CRM

The problem can also lie in your product. Do you have games that people like to play or payment methods that allow them to deposit and withdraw money quickly? If you can’t figure this out by yourself then reach out to the people you’ve lost and ask them for feedback so you can improve your product!

You must retain players to build a highly successful online casino. Without it, your player lifetime will be very short.

In this particular case, player retention is at a very low level. That’s why the number of depositing goes down every single month.

Depending on your market and marketing channels, it can take two or more months to return money spent on customer acquisition. Therefore your player retention plays a huge role in the success of your online gambling business.

Let’s say it takes three months for your online casino to recoup advertising costs.

In this example, to get 25% of your money back as net gaming revenue, you must keep most of the customers you won in the first month.

This is exactly what CRM systems are for.

The CRM system is designed to help with customer acquisition, maintain customer relationships, improve customer retention and increase sales by implementing successful marketing strategies.

A good CRM system helps in this cool way:

  • It helps you know what players like and want.
  • You can run targeted marketing campaigns for different groups of people.
  • It allows you to increase player loyalty and increase ROI.

Without customer retention strategies and a CRM system, you will not be able to achieve a good traffic acquisition budget return rate.

Churn rate

Customer retention rates and churn rates are closely linked. A company that has a low customer retention rate will inevitably have a higher churn rate. Conversely, a high customer retention rate means that churn within the company is minimal. However, it’s important to understand that although these metrics are linked, they serve different purposes.

The customer churn rate focuses primarily on assessing failures and declines in the customer base. It serves as a tool for damage limitation and investigation to identify the underlying factors and mitigate them effectively. The customer retention rate, on the other hand, aims to minimize acquisition costs, assess the overall health of the business, and uncover new growth opportunities.

How do you calculate the churn rate? This can be difficult in practice, as companies have to constantly acquire new customers. Even if business intelligence tools give you a very accurate figure straight away, it’s fair to say that it doesn’t make sense for start-ups to use them from the beginning.

Therefore, you can get a fairly accurate figure by measuring the churn rate over a certain period.

For example: on January 1st an online casino had 400 active players, on January 31st the same online casino had 420 players. In the same month, 120 new players joined, which explains the growth in active players. In reality, 100 players churned (420 – 120).

Churn rate = (number of churned customers / the number of customers you had at the beginning of a given period) * 100

In this case, 100/400 = 0.25 or 25% churn rate.

Calculate your churn rate over a certain period to understand if you’re improving your results. Comparing this metric over different periods (like for example monthly versus weekly) may raise more questions than answers!

Online Casino - Churn Rate

Conversion Rate

When someone mentions the conversion rate as a vital Key Performance Indicator (KPI), it’s not just a number; it’s a crucial insight into your online casino business.

And you need to take a closer look to understand what conversion rate they are talking about.

Three conversion rates are worth checking to assess the actual health of your landing pages and website – Click to Register, Click to Deposit, and Registration to Deposit.

All KPIs are percentages, and the higher, the better, right? But what if the numbers don’t add up? Let’s dive into the details.

Click to Register KPI

Ever wondered how your ads are performing? The Click to Register KPI is your backstage pass to understanding just that.

Analyzing this metric unveils how many people signed up for a specific number of clicks. For instance, if 3072 people clicked on an ad, and 1674 registered, that’s a 54% Click to Register rate. It’s like the applause after a stellar performance – an indicator of success.

This is also a great starting KPI to analyze the performance of your affiliates. If you notice that some of your affiliates have a click-through rate of 50% while others only reach 20%, this can either be due to the source of the traffic (which can happen and is normal) or the landing pages of the affiliates.

You can use this information to give your affiliates valuable insights so they can better convert people into signups.

Click to Deposit KPI

Getting clicks is one thing; turning them into deposits is another. The Click to Deposit KPI scrutinizes this transition, helping you understand if your customer journey is seamless. For instance, if out of 2958 clicks, 1221 resulted in actual deposits, your Click to Deposit rate is 41%.

If this number seems low, it’s time for a backstage check. Perhaps your payment system needs a tune-up, or your online casino isn’t meeting expectations.

Registration to Deposit KPI

This metric is the real deal when it comes to gauging your marketing success. Striving for a 100% signup/deposit rate might sound like a dream, but let’s be practical – acceptable losses and scalable growth are the name of the game.

For instance, if 75 out of 100 registrations result in deposits, you have a 75% Registration to Deposit rate.

Should you strive to reach 100%? The truth is that this is almost impossible and you will probably spend most of your time improving every little detail of the customer journey. Instead of bringing in more affiliates and other traffic sources.

Would you rather have a signup/deposit rate of 75% and make 10 million dollars or a rate of 100% and only have one or two clients? Don’t strive for perfection, strive for results that will allow you to grow.

Player activity and engagement

Since we’ve already talked about the importance of player retention, let’s move on to the things you can analyze to improve your casino’s performance.

Total amount of bets and wagers

By analyzing this metric, you can pinpoint popular games, assess revenue streams, and strategically allocate resources.

In this example, we can see that 1568 players wagered EUR 1,109,242.3 in February.

If you dive in, you can analyze which games and live casino games contributed the most to this figure.

With this information, you can figure out which games people are actually playing so you can put these games at the top of the list. Right in front of their eyes when they open your website.

This information will also give you an indication of what content you should use when developing your customer engagement strategies.

If your people prefer Pragmatic’s games over all others, you can check what promotions Pragmatic offers and incorporate them into your plan.

Time spent on the platform

How much time do your players spend on your platform? Not only online casinos analyze this information. The engineers and marketing experts at Meta, Amazon, and Netflix are spending millions to find out how they can retain users so that they stay longer. For Meta, longer sessions mean more revenue from media buyers. For Amazon, it’s an opportunity to cross-sell relevant products. Netflix is thinking about the retention rate of its monthly subscribers and a list of the best movies.

Rules apply to every online business and the end result is always measured in revenue. For your online casino, this means: more turnover and a higher ARDPU. The more time your players spend playing, the higher the likelihood that the result of their game will be equal to the house edge, resulting in a loss of money.

In return for the money your players spend, your online casino should always be honest and transparent, offer a great gaming experience and provide the best offers.

You can measure the average session duration with Google Analytics. Or check if your platform can measure this metric at a deeper level.

Player activity

Can you offer your players more than just the games they play?

In land-based casinos, players can get free drinks, free rides, and free room service. VIPs get private jets and luxury rooms. And every single player definitely gets a smile from the staff.

Today, you can use various tools to track player activity on your website and turn it into meaningful data. This data can reveal each player’s preferences and provide customized experiences for different scenarios. It’s like tapping them on the shoulder every time something happens.

  • Your player won a big chunk of money? Instead of doing nothing, congratulate them and celebrate with them! This can make the difference between a player who just collects the winnings and one who comes back to enjoy the same moment.
  • Your player has just lost ten games in a row? It might be good for your online casino in the short term, but an experience like that can make them leave your casino for good. As if it were cursed. Instead, offer them a mysterious gift and take the pressure off them.
  • Your player is about to leave the casino? If you know how much time they spend on your site on average, offer them VIP benefits for the next hour.

Tools like Solitics, Fasttrack, and Optimove can use the data, interpret it in real time, and act accordingly to improve the customer experience and your performance metrics.

Financial indicators of your Revenue

Your active players are your most important assets. GGR, NGR, ARPU, and ANDPU show just how much they’re contributing.

Gross Gaming Revenue (GGR)

Now let’s talk money. Gross Gaming Revenue (GGR) is a fundamental metric that quantifies the total amount of money wagered by players minus the winnings paid out to them. Essentially, it represents the total revenue generated from player bets before deducting operating expenses and taxes.

For online casinos, calculating GGR involves summing up the bets placed across all games, including slots, table games, and live casino offerings, and subtracting the winnings paid out to players. This metric provides a clear snapshot of the overall betting activity on the platform and is a key indicator of its financial performance.

For instance, let’s consider an online casino that had 2813 active wagering accounts in January. These players collectively deposited 182,758,40 EUR into their accounts and engaged in various betting activities across the platform. At the end of the month, the total GGR amounted to 73,001.75 EUR.

Now, let’s break down the revenue share agreements typically involved in such scenarios:

  1. Turnkey Platform Charges (5% of GGR): If the online casino operates on a turnkey platform basis, the platform provider usually charges a percentage of the GGR as part of their service fee. In this example, with a GGR of 200,000 EUR, the turnkey platform provider would charge 5% of this amount.Calculation: 5% of 73,001.75 EUR = 3,650 EUR. Therefore, the online casino would owe the turnkey platform provider 3,650 EUR as their service fee for the month based on the revenue share agreement.
  2. Software Providers Charges (e.g., Evolution Gaming – 14% of GGR): If a significant portion of the GGR is generated through specific software providers, such as Evolution Gaming’s live casino offerings, these providers may also charge a percentage of the GGR as their service fee. For example, Evolution Gaming might charge 14% of the GGR generated from their live casino games.Calculation: 14% of 73,001.75 EUR = 10,220 EUR. Therefore, if the entire GGR of 73,000 EUR was generated solely through Evolution Gaming’s live casino, the online casino would owe Evolution Gaming 10,220 EUR as their licensing fee for the month.

By understanding these charges, online casino operators can better manage their finances and assess the profitability of their business operations.

Online Casino GGR

Net Gaming Revenue (NGR)

Net Gaming Revenue (NGR) goes a step further by accounting for additional factors such as bonuses, promotions, and affiliate costs. It represents the actual revenue retained by the casino after deducting these expenses from the gross gaming revenue.

Calculating NGR involves subtracting bonuses, promotional costs, and affiliate commissions from the GGR. This metric provides a more accurate measure of the casino’s profitability by factoring in the impact of incentives and marketing expenses on the bottom line.

NGR is particularly valuable for online casino operators as it helps assess the effectiveness of marketing campaigns, bonus programs, and affiliate partnerships in driving revenue growth. By monitoring NGR alongside GGR, operators can optimize their promotional strategies and maximize profitability while maintaining a balance between player incentives and operational costs.

Average Revenue per User (ARPU)

Average Revenue per User (ARPU) is a key performance indicator that measures the average revenue generated by each active player over a specific period. It provides insights into the monetization efficiency of the player base and helps assess the overall value derived from individual customers.

To calculate ARPU, divide the total revenue generated within a given period by the number of active players during that period. In this example that’s GGR divided by Actives.

This metric offers valuable insights into the spending behavior of players and their contribution to the casino’s revenue stream.

ARPU is essential for online casino operators as it enables them to segment their player base, identify high-value players, and tailor marketing initiatives and loyalty programs accordingly. By increasing ARPU through targeted promotions, personalized offers, and enhanced gaming experiences, operators can boost revenue streams and drive sustainable growth.

ATPU – Average Turnover Per User

This KPI delves into how much your players are willing to bet. For instance, if your ATPU is $100, it means, on average, each player bets $100. Why is this important? Well, it’s like knowing how much popcorn your audience wants during a blockbuster movie – essential for planning.

Do you see a negative trend over several months? Then it’s time to review your offer, gamification elements, tier systems, and other elements that are responsible for people staying on your website and betting more.

ADPU – Average Deposit per User

Including both new and existing customers, the ADPU tells a tale of player behavior. Remember, the longer they stay, the more they lose – a golden rule in the online casino world. If your ADPU is 96.80 EUR, it means that, on average, every player, including existing ones, is depositing 96.80 EUR.

It’s helpful to track this metric over time and against your ANDPU metric to ensure you’re achieving (and exceeding) your planned results by improving your customer retention.

ADPU helps you to understand the value of your players from month to month! If your value drops, is there probably something wrong with customer loyalty? And vice versa!

ANDPU – Average New Deposits per User

This key figure shows the average deposit made by new bettors during a certain period.

The ANDPU not only showcases how much money you’re earning from new accounts but also helps you curate top-notch promotions. For example, if your ANDPU is $55, it means the first deposit in your casino is, on average, $55.

This metric can help you filter out players who might not bring any profit to your online casino.

How? If your ANDPU is $55, you can simply say that the first deposit in your casino is 20 EUR. And you won’t lose anything! You’ll leave out players you don’t want anyway because they won’t bring any profit to your online gambling website.

Marketing and promotion

Online casino marketers use a variety of strategies to attract and retain players in the highly competitive iGaming industry. From targeted advertising campaigns to enticing bonus offers, effective marketing and promotional tactics can have a significant impact on a casino’s success. Different marketing channels can make a significant difference in customer lifetime value. This makes customer acquisition costs one of the most important metrics, as they are directly related to the marketing budget of any online business. If your marketing budget is 50,000 EUR and you pay 50 EUR per paying customer, then you will get 1000 customers.

Cost per acquisition (CPA) or Customer acquisition costs (CAC)

Cost per acquisition (CPA) is an important key figure that measures the costs incurred by an online casino to acquire a new player. It includes all expenses associated with attracting a player to the platform, including advertising costs, affiliate commissions, and promotional incentives.

For example, if an online casino invests EUR 82,816 in a marketing campaign that results in the acquisition of 1518 new players, the CPA would be calculated as follows:

CPA = total marketing costs/number of new players acquired = EUR 82,816 / 1518 players = EUR 54.56 per player

Online Casino - CPA

It is important to note that we only count players who have made a first deposit! There is always a difference between players who have registered on your site and players who have gone one step further and actually topped up their account. The smaller the difference, the better you are doing your job as a casino operator.

Understanding CPA is essential for online casino marketers to evaluate the effectiveness of their acquisition strategies and optimize their marketing budgets accordingly. By monitoring CPA along with other performance indicators, they can identify the most cost-effective acquisition channels and strategically allocate resources to maximize return on investment.

Bonus conversions

Bonus conversions refer to the percentage of players who successfully convert promotional bonuses or incentives into active participation on the platform. It measures the effectiveness of bonus offers in attracting and retaining players and plays a crucial role in optimizing marketing ROI.

For example, if an online casino offers a 100% deposit match bonus and 50% of eligible players claim the bonus and subsequently make additional deposits or wagers, the bonus conversion rate would be calculated as follows:

Bonus Conversion Rate = (Number of Players Claiming Bonus / Total Eligible Players) * 100

By tracking bonus conversion rates and analyzing factors influencing conversion, such as bonus terms, wagering requirements, and game selection, online casino marketers can refine their promotional strategies to maximize player engagement and retention.

online casino bonus conversion rate

Return on Investment (ROI)

Net revenue minus total commissions, divided by total commissions – it’s your guide to profitability. A positive ROI means you’re in the green; a negative suggests it’s time to reassess your strategies. For example, if your net revenue is $59,025.66, your total commissions are $82,816.16, and your ROI is 1-($59,025 /$82,816.16) = -28.73%.

Conclusion

In the dynamic world of online casinos, understanding and improving performance indicators isn’t just about numbers, it’s about creating a thriving business. A successful business is only possible if you know your numbers and use them diligently to answer questions that would improve your business and your customers’ experience. Keep an eye on these metrics, adapt, and watch your online casino become a player favorite.

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Max Kerry

Maxim is the founder of LicenseGentlemen.com We help our small and large clients with online gambling licensing, platforms and payment system providers. After more than 300 successful licensing projects, we know exactly what problems every startup faces. We help our clients get the license quickly, choose the best platform and connect all payment methods so they can focus on their business. We also produce free content you can find on this blog or on YouTube.

Frequently Asked Questions (FAQ)

What is a KPI in gambling?

In the realm of gambling, KPIs, or Key Performance Indicators, serve as vital metrics essential for assessing and enhancing various aspects of online casino operations. These include but are not limited to:

  • Player Retention: Measures the ability to keep players engaged and returning to the platform over time.
  • Customer Acquisition Costs (CAC): Evaluates the expenses incurred in acquiring new players to the online casino.
  • Conversion Rate: Reflects the percentage of website visitors who become active players or customers.
  • Average Revenue Per User (ARPU): Calculates the average income generated from each individual player over a specified period.
  • Gross Gaming Revenue (GGR): Represents the total revenue generated from player wagers before deducting operating expenses.
  • Net Gaming Revenues (NGR): Refers to the revenue retained by the casino after deducting various costs such as bonuses, taxes, and other operational expenses.

These KPIs collectively provide insights into the casino’s performance, helping operators make informed decisions to optimize player engagement, revenue streams, and overall business success.

What is the average CPA for online casinos?

In the realm of online casinos, the Average Cost Per Acquisition (CPA) typically ranges from $5 to $400 per player. However, it’s important to note that this figure can vary significantly depending on market dynamics and the quality of traffic.

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