How operators distribute profits between providers

The financial "hydraulics" of the iGaming operator are not only GGR and bonuses. Before net profit, money passes through a waterfall of distribution between content providers, aggregators, live studios, jackpot networks and the platform. Below is a practical map of models, formulas and contractual nuances.

1) Basic terms and "waterfall" of write-offs

Handle → GGR → NGR → Operating Profit → EBITDA.

GGR = Handle − Player Payments = Handle × (1 − RTP).

NGR = GGR − bonuses − payment costs − gaming tax − jackpot contributions − (sometimes) fees to providers/aggregators if the contract is "from NGR."

Provider royalty/rev-share - the share of a content provider (slots, live games) from GGR or NGR for its games.

Aggregator fee - intermediary commission if content goes through the hub.

Platform fee - payment for the platform/RAM/wallet/hosting (usually fix +% of turnover/revenue).

Important: the contracts clearly stipulate the basis of calculation and the sequence of deductions - hence the differences in the actual share of partners.

2) Provider compensation models

2. 1. Rev-share by GGR (slot classic)

Typical corridor: 8-15% GGR for top providers; niche - 6-10%.

Pros: simple, transparent, quickly checked.

Cons: the provider does not share the operator's payment/bonus costs.

2. 2. Rev-share from NGR (rarely for slots, more often for live casino/show)

Range: 20-35% NGR by its games/tables.

Promos and payments are included in the NGR, making it easier for the operator to keep margins; the provider shares some of the risks.

2. 3. Hybrid: GGR base with "pseudo-NGR" adjustments

Agreed items are deducted (e.g. bonuses for this game before cap, local taxes).

It is used as a compromise in markets with expensive payments/taxes.

2. 4. tiered pricing

The more GGR/NGR per provider directory per month/quarter, the lower the% royalty (or higher the retro rebate).

Often tied to geo (Tier 1/2 markets) and new releases.

2. 5. MG/Minimum Guarantee

Guaranteed minimum per month/quarter (fix $ or equivalent royalty).

If actual rev-share

For MG, the operator usually receives marketing rights/exclusives/release priority.

2. 6. License/fix + small variable

Academic, but found for niche mechanics/certifications: slot/table fix + 2-5% GGR.

3) The role of aggregators and the "chain of commissions"

A large operator rarely has 100 + direct integrations - therefore, an aggregator (hub) appears, taking 2-6% of GGR (sometimes from NGR) from above or inside the provider share.

Possible topologies:

1. Operator → Provider (direct): 10% GGR to the provider.

2. Operator → Aggregator → Provider:

10% GGR to the provider + 3% GGR to the aggregator (15% of the "cap"), or
13% GGR "all-in," the aggregator holds its part and transfers the remainder to the provider.

Contracts fix from which base interest is considered (gross per-game vs net after promos/tax) and which reports are attached.

4) Live Casino and Show: A Different Economy

The base is more often NGR for a specific studio/game, since the studio carries high OPEX (dealers, studios, streaming).

Range: 20-35% NGR, with shooting ranges for table/region turnover; separate price for private tables (branding, limits).

Optional: dedicated tables - fixed fee per hour/month + rev-share.

5) Jackpots: local, network and "progressive contribution"

Contribution rate: 1-3% of the bet goes to the jackpot fund (reduces the current NGR).

Network jackpot: a fund common to several operators; network fee (fix or%) is charged for the network.

Local jackpot: operator-side fund; the provider takes the usual rev-share, but on the basis of GGR without contribution - it is critical to prescribe.

6) Who pays for bonuses, taxes and payments?

The key issue of any contract is the distribution of "leaks":

Bonuses: more often on the operator's side; some providers agree on a cap (for example, bonuses for their slots are deducted from the base up to 2-5% of the GGR of this game).
Payments/PSP: almost always operator; rare pseudo-NGR models allow you to deduct a fixed% from the royalty base.
Gaming tax: depends on jurisdiction and wording. The safe clause is "pre-gaming tax royalties."
Jackpots: contribution is deducted before royalties are calculated (otherwise double deduction).

7) Example of a waterfall payout (one month)

Yeah, but:

GGR (by Provider A slots) = $1,000,000
Bonuses attributable to his games (cap 3% GGR): $30,000
Payment costs for deposits/conclusions (for reference): $ - (not taken into account in the database)
Gaming tax (market): 20% GGR
Contribution to jackpot on these slots: 2% of bets ≈ $20,000 (say equivalent to 2% GGR for simplicity)
Model: GGR-rev-share 12%, base - GGR − bonuses (cap) − contribution, before gaming tax.

Royalty base calculation:

Base = 1,000,000 − 30,000 − 20,000 = $950,000
Provider Royalty (12%) = $114,000

Tax (for the operator): 20% × GGR = $200,000 (does not affect royalties, since the pre-tax base)

Total for provider A slot block:

GGR = $1 000 000
− Bonuses (cap) = $30,000
− Contribution = $20 000
− Provider Royalty = $114,000
− Gaming Tax = $200,000
→ NGR balance = $636,000 (before total payments/marketing/platform)

💡 If the model was NGR-rev-share 25% with a base (GGR − bonuses − contribution − gaming-tax), the provider would receive:
NGR base = 1,000,000 − 30,000 − 20,000 − 200,000 = $750,000 → 25% = $187,500 (significantly more expensive for the operator).

8) Reporting, reconciliations and "three T rule"

Accuracy - Ttiming - Traceability.

Game-level reports: for each game/pool - Handle, Payments, GGR, bonuses (if cap is applicable), contribution, geo/jurisdiction, currency.

Recon with provider/aggregator: monthly reconciliations, FX rate, cut-off dates, error/fraud rate credit notes.

Audit and access rights: providers often require "read-only" to reports; operator - the right to external audit of the provider's logic.

Currencies/FX: fix the source of the rates and the point of translation (EOM, weighted average).

Negative months: The slot portfolio may be in the red (high variance). Practice - no negative carryover for slots and carryover for live casino/poker (discussed contractually).

9) Frequent points of contention and how to resolve them

1. What counts as a cap "bonus"? Frispins, cashback, insurance - to list explicitly.

2. Tax base: pre-tax or post-tax for royalties? Better pre-tax.

3. Jackpots: contribution before/after royalty - fix.

4. Fraud/chargebacks: who carries the risk? Usually an operator; base adjustments are allowed through credit notes with a confirmed fraud.

5. Exclusives/early releases: often exchanged for temporary increased% or MG; register KPIs and marketing.

6. RTP/volatility: changing RTP without agreement is a cause for dispute; keep versioning configs and "change log."

10) How distribution varies by jurisdiction

GGR tax markets (UK/EU/US states): providers benefit from the GGR base; operator - NGR model.

Markets with expensive payments (LatAm/some EU): the goal is pseudo-NGR adjustments (fixed% of payments in the database).

Markets with severe bonus restrictions: the actual BC below → GGR base "hurts" less.

Onshore modes improve Approval Rate/PSP commissions - there is space to increase provider% due to NGR/margin growth.

11) Checklist for CFO/BD before signing

Base definitions: GGR or NGR? What adjustments? Cap on bonuses? Contribution? Pre-tax?
The sequence of deductions in the waterfall and the formula on one page.
Tiers/MG: borders, retro rebates, exclusive terms, SLA releases.
Carryover and negative month rules.
Reporting and timing: game-level format, FX course, deadlines, right to audit/credit notes.
Jackpots: local/network, who holds the fund, who pays the network fee.
Jurisdictions: where permitted, tax/VAT, RNG/studio certification.
Compliance: RG/AML, transparency of bonuses, PF artifacts (if declared in marketing).
Fraud: cancellation policy/chargeback, device/payment binding, signature exchange.

12) Quick leverage to improve margin without conflicts

1. Translate part of the catalogs to Tira grids - with an increase in turnover% itself will decrease.

2. Agree on a cap for bonuses in the royalty base (2-5% GGR for the game) and a list of excluded mechanics.

3. Clarify the pre-tax formula in markets with a high gaming tax.

4. Optimize the aggregator tail: direct integrations for the TOP portfolio, the hub for the "long tail."

5. Jackpots: Transparent contribution and reset/cap to avoid "eating" NGR.

6. Geo-mix: promote games with the best real hold/minute production in "expensive" jurisdictions.

7. Reports and alerts: online monitoring of GGR/min by providers to quickly disable "minus" campaigns.

The distribution of profits between the operator and providers is a set of contractual formulas and priorities, and not one magic percentage. In practice, operators who:

Tightly fix the base and waterfall (what is deducted and when), Balance GGR- and NGR-models under the jurisdiction and cost of payments, Manage teirs/MG/exclusives as a portfolio, Transparently report and reconcile, minimizing disputes, And use jackpots, content and geo-mix for sustainable margins.

This approach turns the relationship with providers from "bargaining for interest" into joint optimization of NGR and LTV, where both sides earn more - and more predictably.