Here’s a question that may seem silly until you think about it: how do you know your business is doing well? The size of your bank account, obviously. Case closed, right? Well, not quite. It’s a long road to a full purse, and in iGaming—an extremely competitive venture—only those who manage to dot all the “Is” and cross all the “Ts” win.
Understanding and leveraging key performance metrics is crucial for small and medium-sized casino managers and owners. Unlike traditional casinos, online platforms generate vast amounts of data. When properly analyzed, that data offers actionable insights into player behavior, marketing effectiveness, and operational efficiency, giving smart operators a major competitive edge.
This article delves into the essential metrics every online casino should track, explains how to measure them, and discusses what constitutes success for each metric. By the time you’re done reading, you'll gain a deeper understanding of how to harness the power of data—and that's when you'll start seeing a noticeable increase in your bank account.
Key Metrics for Online Casinos
The main indicator of a casino's success will always be net revenue. Simple as that: if conversion leads to an increase in net revenue, it indicates high efficiency. Otherwise, costs may be excessive, and while the operator may remain profitable, the potential for greater growth is missed.
However, it’s well-structured analytics and reporting that enable efficient business management, although this precious knowledge doesn’t come quickly or cheaply. A product that better meets user needs ultimately generates more net revenue, and even if a provider is more expensive, players stay longer and bring in more money. The ability to plot the shortest route from inception to bank, navigating the maze of data streams efficiently is any operator's Holy Grail.
Main online casino metrics
For better understanding and management, we will categorize key metrics into four main groups: Revenue Metrics, Player Metrics, Marketing Metrics, and Operational Metrics. Each category encompasses specific KPIs that collectively offer a comprehensive view of the casino's health and areas for potential improvement.
💵 Revenue Metrics
Revenue metrics are crucial for understanding an online casino's financial performance. They help assess profitability, revenue generation efficiency, and overall financial health.
Gross Gaming Revenue (GGR)
Definition: The total amount wagered by players minus the total amount paid out in winnings.
Significance: GGR provides a snapshot of the total revenue generated from gaming activities before any expenses are deducted. It is a primary indicator of the casino's revenue performance.
Indicators of Success: A consistent upward trend in GGR month-over-month suggests healthy player activity and engagement.
Benchmark: A 10-15% increase in GGR year-over-year is considered a strong indicator of growth.
Net Gaming Revenue (NGR)
Definition: The Gross Gaming Revenue (GGR) minus bonuses, promotional costs, and other player incentives.
Significance: NGR offers a more accurate picture of the actual revenue the casino retains after accounting for player bonuses and incentives. It reflects the net profitability from gaming activities.
Indicators of Success: NGR should grow in parallel with GGR, but at a rate that accounts for promotional expenses. A stable or increasing NGR while maintaining or reducing promotional costs indicates efficient marketing.
Benchmark: A 5-10% increase in NGR annually, with promotional costs staying below 20% of GGR, is ideal.
Average Revenue Per User (ARPU)
Definition: The average revenue generated per user.
Significance: ARPU helps gauge the casino's financial performance per user. An increasing ARPU suggests the casino successfully upsells or cross-sells to its customers.
Indicators of Success: A steadily increasing ARPU indicates successful upselling and effective player engagement strategies.
Benchmark: A monthly ARPU of $100-$200 is considered healthy for many online casinos.
🙋♂️ Player Metrics
Player metrics focus on understanding player behavior, engagement, and retention. These metrics are vital for creating effective retention strategies and enhancing player experience.
Player Retention Rate
Definition: The percentage of players who continue to play over a given period.
Significance: A high retention rate indicates strong player loyalty and satisfaction. It is crucial for maintaining a stable and engaged player base.
Indicators of Success: High retention rates suggest player satisfaction and loyalty.
Benchmark: A retention rate of 70-80% over a 30-day period is a strong indicator of success.
It is important to understand that casino operators must have a unified view of the significance of all metrics. Instinctively, so to speak, they will evaluate KPIs that, in one way or another, affect their profit and loss (P&L), but maintaining the bird's-eye view on the entire BI suit is paramount.
But initially, attention should be given to the number of registrations. Then operators should look at the conversion of registrations into the first deposit. Following this, the percentage of users making a second deposit becomes an important indicator. This metric reflects the quality of the product in terms of attracting and retaining traffic.
Smart operators also analyze game-level metrics, such as RTP (Return to Player), to understand how many users return to the game after the first gambling session. Analyzing this data helps identify the preferences of different user groups and optimize offerings accordingly.
Sergey Ghazaryan, Head of the Casino Unit at GR8 Tech
Churn Rate
Definition: The percentage of customers who stop using the service over a given period.
Significance: Monitoring churn rate helps identify retention issues. A low churn rate indicates that players are satisfied and engaged, while a high churn rate signals a need for better retention strategies.
Indicators of Success: A low churn rate indicates that players are consistently returning to play.
Benchmark: A monthly churn rate below 5% is typically considered excellent.
Player Lifetime Value (LTV)
Definition: The total revenue expected from a single customer account over its lifetime.
Significance: PLTV provides insight into a customer's long-term value, helping casinos balance their acquisition costs with potential revenue. A higher PLTV compared to CAC indicates a profitable customer base.
Indicators of Success: A high PLTV relative to CAC shows that the casino generates substantial revenue from each player.
Benchmark: A PLTV at least 3-4 times higher than CAC is a good target.
Operators should carefully analyze and focus on improving the player LTV, as it is pretty much the revenue they will make per player. With LTVs in mind, Operators can plan ahead, invest in traffic with more predictability, and grow this.
Sergey Ghazaryan, Head of the Casino Unit at GR8 Tech
🧲 Marketing Metrics
Marketing metrics are essential for evaluating the effectiveness of marketing campaigns and understanding how well the casino attracts and converts new players.
Customer Acquisition Cost (CAC)
Definition: The cost associated with acquiring a new customer.
Significance: Understanding CAC helps evaluate the efficiency of marketing and advertising campaigns. A lower CAC indicates that the casino effectively attracts new customers at a minimal cost.
Indicators of Success: A lower CAC suggests efficient marketing strategies and cost-effective player acquisition.
Benchmark: A CAC below $200 is generally considered effective, though this can vary by market and strategy.
Marketing ROI
Definition: Marketing ROI measures the return on investment from marketing activities, calculated by dividing the revenue generated by the marketing costs.
Significance: Marketing ROI is crucial for understanding the effectiveness and profitability of marketing campaigns. A higher Marketing ROI indicates that marketing efforts are generating substantial returns relative to their cost.
Indicators of Success: A high Marketing ROI suggests that marketing efforts are yielding significant returns compared to their expenditure.
Benchmark: A Marketing ROI of 5:1 (five dollars earned for every dollar spent) is considered a strong indicator of successful marketing.
Percentage of Registrations to First-Time Depositors (FTD)
Definition: The percentage of registrations to FTD is a metric that measures the proportion of new registrations on an online casino platform that convert into first-time depositors.
Significance: This metric is vital for assessing the quality of new registrations and the effectiveness of marketing and onboarding processes. A higher percentage indicates that a larger portion of new users are converting into paying customers.
Indicators of Success: A high percentage of registrations to FTD indicates successful user acquisition and conversion strategies.
Benchmark: Industry benchmarks can vary, but aiming for a conversion rate of 20-30% from registrations to first-time depositors is generally considered effective.
If the platform demonstrates good metrics on transitioning from registration to the first deposit across different regions, it indicates that operators know how to configure and promote it properly because acquiring traffic is expensive; operators need to convert as much of it as possible. Purchasing traffic is not a revenue-sharing model, but direct costs that operators incur for each acquired player, which can cost 200-300 euros per user in Europe. These expenses need to be recouped.
Sergey Ghazaryan, Head of the Casino Unit at GR8 Tech
⚙️ Operational Metrics
Operational metrics focus on the efficiency and effectiveness of the casino's operations. These metrics help ensure smooth functioning and high-quality service delivery.
Downtime
Definition: The time the casino platform is unavailable or experiencing outages.
Significance: Minimizing downtime is crucial for maintaining a reliable and accessible gaming experience for players. High uptime indicates robust and stable platform performance.
Indicators of Success: Minimal downtime ensures a reliable and accessible platform, enhancing player satisfaction.
Benchmark: Achieving 99.9% uptime (less than 9 hours of downtime annually) is considered excellent.
Transaction Speed
Definition: The time taken to process deposits and withdrawals.
Significance: Fast transaction speeds enhance player satisfaction and trust, improving overall user experience.
Indicators of Success: Fast processing times for deposits and withdrawals improve player trust and satisfaction.
Benchmark: Processing deposits instantly and withdrawals within 24 hours is a standard target.
Customer Support Response Time
Definition: The average time to respond to customer inquiries and resolve issues.
Significance: Quick response times are essential for customer service and player satisfaction.
Indicators of Success: Quick and efficient customer support enhances the overall player experience.
Benchmark: Responding to inquiries within 1 hour and resolving issues within 24 hours is ideal.
Cracking the KPI Code
In the previous sections, we highlighted some of the most critical KPIs for online casinos. While these key performance indicators are universally important, operators often need more resources to monitor all of them comprehensively. Therefore, seeking expert assistance in creating tailored analytics packages that align with specific business objectives is crucial.
A good example is optimizing bonus utilization. Providers often offer bonuses as cashback, which operators can pass on to clients, helping to reduce costs. Understanding the percentage of available deductions used aids in this optimization.
Launching a project with a platform experienced in a specific market is highly advantageous. Such platforms can share valuable knowledge during the launch phase, including how to structure bonus chains effectively, manage rollovers, and consider regional nuances. The goal is to design appealing yet cost-efficient retention structures that attract players in a particular geography.
Providers also offer discounts for promoting their games. If a game is popular and the provider is reliable, operators benefit from promoting it by obtaining discounts and reducing their expenses. This creates a win-win situation, where providers gain additional revenue and improve game positioning, but the cost-benefit ratio must be carefully monitored so as not to miss any cross-promotion opportunities.
GR8 Tech To The Rescue
You must have noticed that throughout this article, the recurring theme has been the necessity for operators to have a reliable partner to navigate the complexities of iGaming KPIs. Here, GR8 Tech stands out as that essential ally, providing support in optimizing performance and achieving success. Here's why:
BI tools enable operators to slice and dice their data as deep as they want, generating actionable insights that drive improvements to their KPS. They enable the creation of custom reports and come with a list of preset reports developed based on industry best practices.
Sergey Ghazaryan, Head of the Casino Unit at GR8 Tech
GR8 Tech also has an AI-based recommendation engine that analyzes various metrics to suggest the most suitable games. This recommendation engine helps operators offer games likely to appeal to players and benefit the casino. It might suggest a more cost-effective option similar to an expensive game, encouraging players to try more games, increasing engagement, and reducing costs. Additionally, this solution supports new providers who may have lower costs but high potential, benefiting operators at a lower expense.
Optimization and traffic quality are critical. GR8 Tech offers affiliate solutions to distinguish between good and bad traffic and prevent fraud, which are crucial for effective operations. While operators focus on acquiring traffic, GR8 Tech provides the technology for analyzing the payoff of purchased traffic and determining the best strategies based on market conditions.
Your Winning Hand
Understanding and leveraging KPIs is crucial for the success of online casinos, especially for small and medium-sized operators. These metrics offer actionable insights into player behavior, marketing effectiveness, and operational efficiency, providing a competitive edge in the iGaming industry. Essential metrics can be categorized into four main groups: Revenue Metrics, Player Metrics, Marketing Metrics, and Operational Metrics. Each category encompasses specific KPIs that collectively offer a comprehensive view of the casino's health and areas for potential improvement.
Revenue Metrics, such as Gross Gaming Revenue (GGR), Net Gaming Revenue (NGR), and Average Revenue Per User (ARPU), are crucial for assessing financial performance and profitability. Benchmarks for these metrics include a 10-15% annual increase in GGR, a 5-10% increase in NGR with promotional costs below 20% of GGR, and a monthly ARPU range of $100-$200.
Player Metrics, focusing on player behavior, engagement, and retention, are vital for creating effective retention strategies and enhancing the player experience. Important benchmarks include a 70-80% retention rate over 30 days, a monthly churn rate below 5%, and a Player Lifetime Value (PLTV) at least 3-4 times higher than Customer Acquisition Cost (CAC).
Marketing Metrics evaluate the effectiveness of marketing campaigns and how well the casino attracts and converts new players. Key metrics include Customer Acquisition Cost (CAC), Return on Marketing Investment (ROMI), and Conversion Rate, with effective benchmarks being a CAC below $200, a ROMI of 5:1, and a conversion rate of 10-20%.
Operational Metrics focus on the efficiency and effectiveness of the casino's operations, ensuring smooth functioning and high-quality service delivery. Ideal benchmarks include achieving 99.9% uptime, processing deposits instantly and withdrawals within 24 hours, and responding to customer inquiries within 1 hour, and resolving issues within 24 hours.
To help online casinos optimize their performance, GR8 Tech designs tailor-made BI solutions that act as an intermediary between operators and providers, ensuring seamless data transfer, creating custom reports, and enhancing operational efficiency. Our recommendation AI and bonus optimization tools further help in distinguishing good traffic from bad, preventing fraud, and ultimately driving success for online casinos.
