GGR vs NGR Explained: Formulas, Deductions and Worked Examples

Gross gaming revenue (GGR) measures the difference between eligible stakes and player winnings for a simplified gambling product. Net gaming revenue (NGR) starts with a revenue figure and deducts specified items, which may include bonuses, gambling duties and fees. Neither figure automatically represents profit.

The important complication is that NGR is not one universal calculation. An affiliate contract, a supplier agreement and a company’s financial report can use different definitions. The headline percentage matters less if you have not established the amount it applies to.

This guide explains the formulas, provides worked examples and shows how to compare revenue figures without confusing deposits, turnover and earnings.

What is GGR?

For a straightforward house-banked casino or fixed-odds betting example:

GGR = stakes accepted − winnings paid

Both sides of that calculation must refer to the same relevant activity and reporting period. “Winnings” should include the amounts returned to customers under the applicable measurement rules; confusing a gross payout with only the profit portion of a winning bet can distort the result.

Suppose a hypothetical casino records £500,000 in eligible stakes and £475,000 in payouts. Its simplified GGR is £25,000.

The £500,000 is gambling turnover, not revenue. The £25,000 is the amount retained before the other costs considered in the relevant commercial model.

This simplified calculation is useful for explaining the concept. It should not replace the detailed instructions governing a regulatory return, tax calculation or specific accounting disclosure.

How GGY differs from GGR

In Great Britain, the Gambling Commission uses gross gambling yield (GGY) in its reporting framework.

Its regulatory returns guidance sets out the formula A + B − C: stakes, plus other qualifying amounts accruing directly from licensed activities, minus prizes or winnings.

The guidance also explains the treatment of free bets, bonuses and loyalty arrangements. Promotional amounts should not simply be inserted into the calculation as though every bonus were unrestricted cash.

GGR and GGY are often used to discuss similar gross gambling economics, but an analyst should not assume that every company’s GGR line is identical to the Commission’s regulatory GGY definition.

Use the stated reporting basis, especially when comparing a company presentation with official industry statistics.

What is NGR?

A general way to express net gaming revenue is:

NGR = starting gaming revenue − deductions included in the stated definition

That wording is deliberately conditional. The definition determines which deductions apply and whether they have already been accounted for elsewhere.

A contract may include bonus costs and gambling duties. Another may also include payment charges, administration fees or other agreed adjustments. An annual report may use a revenue measure governed by different accounting policies.

Gambling.com Group’s 2025 annual report illustrates the commercial terminology: it describes NGR as involving deductions such as bonuses, taxes and fees. That is a documented company definition, not evidence that every operator applies an identical formula.

Before accepting “30% of NGR”, establish what that NGR means in the agreement you will actually sign.

GGR to NGR: a worked example

The following figures are hypothetical and illustrate one possible contractual model. They are not market averages or a statement of current tax rates.

A casino has:

• Eligible stakes: £500,000
• Player payouts: £475,000
• Simplified GGR: £25,000

Its illustrative agreement then permits:

• Bonus adjustment: £3,000
• Gambling duty adjustment: £5,000
• Payment-related charges: £1,000

The calculation is:

£25,000 − £3,000 − £5,000 − £1,000 = £16,000 NGR

An affiliate with a revenue-share agreement paying 30% of that defined amount would earn:

£16,000 × 30% = £4,800

The duty adjustment is an assumed amount for this example, not a tax-rate recommendation. Actual liability depends on the product, jurisdiction and applicable tax rules.

Also check whether an expense has already reduced the starting figure. Deducting the same promotional cost twice would produce a misleading result.

Why a higher revenue-share percentage can pay less

Consider two hypothetical agreements for the same period and customer cohort.

Agreement A

• Starting GGR: £20,000
• Agreed deductions: £4,000
• Commission base: £16,000
• Revenue share: 25%
• Commission: £4,000

Agreement B

• Starting GGR: £20,000
• Agreed deductions: £9,000
• Commission base: £11,000
• Revenue share: 30%
• Commission: £3,300

Agreement B advertises the higher percentage but produces £700 less in this example.

This does not prove that lower percentages are generally better. It demonstrates why comparisons should use the same assumptions and examine deductions, attribution, payment terms and adjustments.

A percentage is only one component of the commercial offer.

Deposits are not GGR

A deposit transfers money into a customer’s gambling balance. It does not establish how much has been staked, won or retained by the operator.

A customer might deposit £100 and leave it untouched. Another might stake the same original £100 repeatedly as winnings return to the balance. Their turnover could exceed the deposit without an equivalent increase in revenue.

Withdrawals also do not provide a complete revenue calculation. They can relate to balances accumulated in an earlier period.

For a revenue analysis, use the transactions and recognition rules defining the measure. Do not substitute “deposits minus withdrawals” because those figures are easier to obtain.

GGR margin and sportsbook hold

A simplified gross margin calculation is:

GGR margin = GGR ÷ eligible stakes × 100

If stakes are £500,000 and GGR is £25,000, the realised margin is 5%.

In sportsbook discussion, “hold” often refers to the share of handle retained after paying winnings. Definitions and presentation still need checking.

A realised margin is not a guaranteed future result. Customer outcomes and the mix of bets or games can change the figure. A short period can be particularly unrepresentative.

Nor should a slot’s theoretical return-to-player percentage be treated as a promise about one customer’s session or as an exact prediction of an operator’s monthly margin.

Revenue models that need different treatment

House-banked casino and fixed-odds betting examples do not cover every iGaming product.

Peer-to-peer poker: the platform can earn rake or tournament fees while customers play against one another. Adding up every pot is not a measure of the platform’s revenue.

Betting exchanges: commission can arise from facilitating bets between customers. The bookmaker-style stakes-minus-payouts explanation does not capture every aspect of exchange accounting.

Business-to-business suppliers: a supplier’s reported revenue can be fees earned from operator customers, rather than the gross gambling revenue those operators generate.

The Commission’s definitions of terms help distinguish regulated activities and industry-statistics terminology. For financial reporting, also examine the individual company’s revenue-recognition policy.

Why NGR is not profit

An NGR measure may deduct selected costs while excluding many others.

Payroll, office costs, customer support, technology development, general marketing, financing costs and other expenses may remain outside the reported measure.

Likewise, an affiliate’s commission revenue is not its profit. The affiliate still has publishing, staffing, tools and customer-acquisition costs of its own.

When evaluating an investment or business, move through the financial statements rather than treating a favourable NGR trend as the entire profitability story.

Revenue growth, gross margin, operating profit and cash generation answer different questions.

Contract deductions and carryover

Three areas deserve particular attention.

The deduction schedule

Ask for a precise definition and an example reconciliation from starting revenue to commission. Identify whether charges are fixed, proportional or allocated from a shared cost pool.

A broad phrase such as “all applicable expenses” is harder to model than a defined schedule. Ask how changes are communicated.

Negative revenue

A customer cohort can produce a negative result over a period if payouts exceed the relevant revenue and adjustments.

An agreement may carry that negative amount into the next period, reset it or apply special treatment to particular customers. Do not infer the answer from an advertising page.

Reconciliation and payment

Determine when figures become final, which corrections are permitted and how disputes are handled.

For a real contractual example, the Entain Partners terms contain provisions covering revenue calculations and payment arrangements. They are useful as an example of why the complete agreement matters, not as a substitute for reviewing your own terms.

Comparing published industry figures

Start with four checks:

1. Scope: casino only, sports betting, several products or an entire group?
2. Geography: one regulated market or international activity?
3. Period: calendar year, financial year, quarter or another interval?
4. Basis: stakes, GGR/GGY, NGR, accounting revenue or profit?

Taxes introduce another distinction. HMRC’s gambling tax guidance explains different gambling duties. Tax receipts are government income, not the same thing as operator GGR.

If two figures have different boundaries, present that difference explicitly. Do not calculate a growth rate or market share from mismatched measures.

A practical revenue review checklist

Before using a GGR or NGR number in a business decision, establish:

• The precise definition and included products.
• The period and treatment of unsettled transactions.
• Whether payouts include returned stakes where relevant.
• How cash and promotional balances are handled.
• Which deductions apply and whether anything is counted twice.
• Whether figures cover one customer, a cohort or the whole business.
• How negative results and later corrections are treated.
• The difference between reported revenue and cash paid.

Keep the definition alongside the number in any working spreadsheet. That prevents a familiar label from silently changing meaning between datasets.

Frequently asked questions

Can GGR be negative?

Yes. In a relevant period, payouts can exceed the eligible stakes and other included revenue. The treatment depends on the applicable reporting framework and commercial agreement.

Is NGR always lower than GGR?

It is generally lower when a positive starting GGR is reduced by positive deductions. Adjustments, negative periods and differing reporting bases mean you should still examine the actual reconciliation.

Are gambling duties deducted from GGR?

They may be deducted when arriving at a particular NGR or accounting measure. That does not mean they reduce regulatory GGY in the same way. Check both the tax rules and the revenue definition.

Which metric is best for affiliate commission?

The metric specified in a transparent, workable agreement. A GGR-based and an NGR-based offer cannot be judged on their percentages alone.

What is the most useful distinction?

Stakes describe activity, gross revenue describes the result before specified deductions, net revenue reflects a defined set of adjustments, and profit reflects a broader accounting outcome. Treating those as separate steps makes commercial comparisons much more reliable.

Featured image: RDNE Stock project / Pexels.