How online casino profits and margins are formed

Online casino profits are not a "miracle algorithm," but the result of discipline along the chain: from the mathematics of games and payments to the economics of bonuses and marketing. Below is a compact "terrain map" that shows where margins are born and where they leak.

1) Basic income formula

Handle → GGR → NGR → Gross Profit → OPEX → EBITDA → Net Profit

GGR (Gross Gaming Revenue) = Handle − Payouts to players = Handle × (1 − RTP) = Handle × HE.

NGR (Net Gaming Revenue) = GGR − bonuses − jackpot deductions − royalties to providers − payment commissions − gaming taxes.

EBITDA = NGR − marketing − payroll − hosting/infra − G & A.

💡 For poker/P2P instead of HE source - rake (commission) and tournament fee.

2) What is the vertical margin

Slots

Margin source: HE (typically 3-6%), high frequency of bets.

Costs: royalties to content provider (often 8-15% GGR/NGR), bonuses/freespins, payments, tax.

Layv-casino

HE close to "code" margin but lower rate bets, above OPEX (studio/dealers/video).

Conversion and retention are better due to the "show effect."

Poker/P2P

Income - rake 3-5% of the bank (with a cap), the risk of payments is lower, but its own anti-fraud agenda (bots/collusions).

3) Expense Map: Where GGR Leaks

1. Bonuses (deposit, freespins, cashback) are a key margin eater. Purpose: Bonus Cost ≤ 12-18% GGR (depends on the market).

2. Jackpots - deductions of 1-3% of the bet/revenue; increase ARPU/Retention but decrease current NGR.

3. Provider royalties are a percentage of GGR/NGR for content and live studios.

4. Payments - PSP, FX, anti-chargeback fees. Strong leverage - Approval Rate and local methods.

5. Gaming taxes/levies and licenses are different by jurisdiction, planned in advance.

6. Other - anti-fraud, KYC/AML, hosting, CDN, monitoring.

4) Unit economics on the fingers

Let in a month:

Active Players A = 50,000
Turnover on active Handle/Active = $250
RTP = 96% ⇒ HE = 4% → GGR/Active = $10 → GGR = $500 000

Write-offs:

Bonuses 15% GGR → − $75,000
12% GGR → provider royalties − $60,000
Payments 0.6% Handle (Equiv. ~ 1.5% GGR) → − $7,500
Gaming tax 20% GGR → −$100 000

NGR ≈ $500 000 − (75 + 60 + 7. 5 + 100)k = $257 500

OPEX: marketing $90k, salaries $45k, infra $12k, other $13k → EBITDA ≈ $97,500

EBITDA margin на NGR ≈ 37,9%

💡 Note: for your project, substitute your bonus/tax/royalty benchmarks.

5) LTV, CAC and marketing return

LTV ≈ ARPPU × (margin after bonuses and payments) × life expectancy (in months).

The target is LTV/CAC ≥ 2 × (preferably 3 × in mature markets).

LTV main levers: Retention (D30/D90), session frequency, Approval Rate, withdrawal speed (affects re-deposit).

6) VIP structure and long tail

The distribution of revenue is right-sided: 5-10% of payers can give 40-60% of GGR.

VIP engines: fast payouts, personal limits, tournaments/statuses, but a strict RG circuit (limits, cool-off, monitoring).

Metrics: VIP share of GGR, Churn VIP, Time-to-Payout VIP.

7) Payments: where profit is made (or lost)

Approval Rate (+ 5 pp) often gives more GGR than similar growth in the marketing budget.

Local methods (bank transfers, wallets, vouchers) reduce cost and refusal.

Conclusions: SLAs on payments and "readable receipts" → the growth of trust and Retention.

8) Bonus policy: Economics instead of giveaways

Segmentation (new/reactivatable/VIP/outflow prone).

Caps and throttling, non-offensive promotions, anti-abuse (wagering, limits on risk metrics).

KPI: Bonus Cost% GGR, Abuse Rate, Incremental LTV on $1 bonus.

9) Content mix and variance management

The balance of high- and low-touch games → the predictability of cash flow.

Jackpots: contribution rate, cap/reset, transparent mechanics.

Live content on primetime, missions and "seasons" - the growth of sessions without overheating bonuses.

10) Antifraud, compliance and trust

Graph analytics of connections, device binding, scoring by behavioral signals (without storing "raw" biometrics).

Provably-Fair 2. 0: commit-revil odds, signed configs, "integrity calculator."

Responsible play (RG): personal limits, pauses, readable risks.

11) Margin scenario analysis (sensitivity)

− 3 p.p. Bonus Cost (from 18% to 15%) at GGR $500k → + $15k to NGR (in our example it is + 5.8% to EBITDA).

+ 5 p.p. Approval Rate with constant marketing → Handle/Active growth (usually + 3-8%), multiplicative on GGR.

− 2 p.p. royalties (from 12% to 10%) → + $10k to NGR for every $500k GGR.

Gaming tax + 2 pp → direct NGR reduction; partially offset by carrying traffic to games with better NOT/speed.

12) KPI-frame for "health" marginality

Before write-offs: Handle, GGR, GGR/Active, actual HE/RTP, Volatility Index.

After write-offs: NGR, Bonus Cost% GGR, Provider Share% GGR, Payment Cost% Handle, Gaming Tax% GGR.

Marketing: CAC, LTV/CAC, Payer Conversion, Retention D7/D30/D90.

VIP: VIP share of GGR, Churn VIP, Time-to-Payout VIP.

Операции: Approval Rate, Time-to-Payout, Fraud-Blocked Rate, Refund/Chargeback Rate.

Finance: EBITDA margin (on NGR), Cash Conversion, Runway (for aggressive growth).

13) Earnings acceleration checklist (no brand damage)

1. Payments: add local methods, PSP cascades, target Approval Rate by jurisdiction, SLA by conclusions.

2. Bonuses: targeting and caps, anti-stacking, "cost to hold," seasonal calendar instead of distributions.

3. Content: volatility balance, jackpots with transparent mechanics, prime-time live tables.

4. VIP: personal perks + RG-contour, quick payments, dedicated support.

5. Antifraud: scoring graph and rules in the code, red-tim tests for bonus abuse.

6. Trust: PF artifacts, readable receipts, returns policy, transparent terms.

7. Operations: monitor KPI daily; A/B spin limits, missions and promos.

14) Mini P&L plate (template for your model)

Handle ……… $

RTP / HE ……… % / % → GGR ……… $
Less: Bonuses......... $, Royalty......... $, Payments......... $, Taxes......... $
→ NGR ……… $
Minus OPEX: Marketing......... $, Staff......... $, Infra......... $, Other......... $
→ EBITDA ……… $ (% NGR)
Ключевые KPI: Approval Rate ……… %, Bonus Cost% ……… %, Provider Share% ……… %, Time-to-Payout ……… ч, LTV/CAC ………

Online casino marginality is the arithmetic of managed little things: HE/RTP → GGR, "leak cleaning" → NGR, OPEX discipline and a healthy funnel. Profits grow where:

payments are frictionless, bonuses work to hold rather than "burn" the budget, content and jackpots manage variance, VIP service is fast and responsible, trust is secured by Provably-Fair and readable rules.

This is how a model is built in which turnover growth turns into sustainable profit, and not into a cost race.