Can someone help me understand these affiliate dashboard figures?

[FanieZevgolis]

Hi, could someone please help me understand how these deductions are being calculated?

What I am struggling to understand is how Gross Revenue / Rake of R4,561.99 ends up with a Commission Base of only R331.42 and commission of R66.27. I am on a 20% revenue-share agreement, so the final commission itself appears to calculate correctly from the Commission Base. What I do not understand is how the Commission Base is being reduced so heavily by tax, admin cost and expenses.

Is this normal for a BetConstruct programme, or am I interpreting these figures incorrectly? Could this also be caused by a setting or configuration on the affiliate programme side, for example how tax, admin costs or other deductions have been set up? I am wondering whether there is something the affiliate manager should check in the programme settings.

Affiliate Performance Summary
Commission
R66.27
CPA
0
Deposits
R29,103.38
Deposit Count
149
FTD Count
28
Withdrawals
R5,060.00
Bets
R37,338.35
Wins
R32,776.35
Gross Revenue / Rake
R4,561.99
Tax
R1,995.51
Admin Cost
R729.92
Expenses
R1,455.13
Converted Bonuses
R50.00
Casino Cashback Bonus
R0.00
Commission Base
R331.42
Players CPA Count
0

Any help would be appreciated.

[dumindu]

If the casino operator has a valid license in South Africa and the latest proposed 20% tax increase is already implemented, I am not surprised by that massive tax deduction from the GGR, as licensed casino operators in South Africa are supposed to pay around an 39% effective tax on GGR. The only concern is that the tax deduction is 43% instead of 39%. It may be that they are paying an extra provincial tax.
I am assuming that you are in a Rev Share agreement with NNCO. If you accumulated the 28 FTDs within a month and can drive traffic consistently, it's better to negotiate with the affiliate manager to increase your Rev Share to at least 35%.

[Theratman]

Which site is it? There are some horrible SA sites that put the providers fees directly onto the affiliates, so if someone deposits and does a lot of spins then even if they lose their deposit they will be negative rev as the operator passed the spin admin cost to the affiliate. I would hazard a guess that the operator is possibly Playcoza here.

[FanieZevgolis]

Hey Theratman, I can’t mention which site it is because I keep individual affiliate relationships confidential, but I can tell you that I have a very good relationship with this operator.

My main concern is how high the deductions are. I did the maths and, based on the Gross Revenue / Rake, the tax deduction is roughly 43.7%(, admin costs are 16.0%, expenses are 31.9%, and converted bonuses are another 1.1%. That leaves me with only about 7.3% of the original Gross Revenue / Rake as the commission base before my affiliate commission is even calculated.

I’m trying to figure out where the calculation is going wrong so I can point it out to them, in case something has been misconfigured on their side

[FanieZevgolis]

I’m sorry my friend, but I don’t think you understand what I’m asking . The proposed 20% tax increase has not been implemented, so that is not relevant here. I’m based in South Africa and can confirm that. My question is specifically about how the commission base is being calculated and if these deductions are normal.

[dumindu]

I’m sorry my friend, but I don’t think you understand what I’m asking . The proposed 20% tax increase has not been implemented, so that is not relevant here. I’m based in South Africa and can confirm that. My question is specifically about how the commission base is being calculated and if these deductions are normal.

If the casino brand holds a valid online gambling license in South Africa and you are sending South African traffic to them, the tax deduction is a major factor here a 43% deduction is abnormal. Since you confirmed that the proposed tax increase for casino operators has not been implemented yet, the rate should remain around 19%–23% rather than 43.7%. You should clarify this directly with the affiliate manager. The admin costs are also on the higher side, which I would question as well. In my view, cost and expense deductions exceeding 50% of GGR for the NGR calculation are a major red flag, especially without a significant casino bonus deduction.

You mentioned that you have a very good relationship with this operator. However, staying on a typical 20% rev share on NGR isn't worthwhile with such massive deductions. Try negotiating for at least 35% with NNCO or moving to a hybrid deal. Otherwise, you are essentially sending free traffic to the operator, they certainly couldn't acquire 28 FTDs for just 66.27 ZAR via Google or Meta Ads.

P.S. Since you haven't provided all the context, I am assuming you are targeting South African players and that the brand holds a valid local license, meaning the operator pays applicable taxes on GGR to the South African tax authority.

[Theratman]

Hey Theratman, I can’t mention which site it is because I keep individual affiliate relationships confidential, but I can tell you that I have a very good relationship with this operator.

My main concern is how high the deductions are. I did the maths and, based on the Gross Revenue / Rake, the tax deduction is roughly 43.7%(, admin costs are 16.0%, expenses are 31.9%, and converted bonuses are another 1.1%. That leaves me with only about 7.3% of the original Gross Revenue / Rake as the commission base before my affiliate commission is even calculated.

I’m trying to figure out where the calculation is going wrong so I can point it out to them, in case something has been misconfigured on their side

Your maths is correct. These deductions are not normal. I'd speak to the AM about it, ask them directly what the 48% admin and expense costs are for. (I suspect it's passing on provider fees).

Hollywoodbets used to have a flat 10% admin fee baked into their rev share, which dropped it down signficantly from the 20% they offered, but not to this degree.

[FanieZevgolis]

Just a quick update for everyone on this. They have now increased my revenue share to 30% and have agreed that there is an issue with the way the deductions and taxes are being calculated.

I’m still trying to get a clearer understanding of how the deductions and commission base are being calculated, but I appreciate that they have taken my concerns seriously and adjusted the revenue-share percentage.

If anyone has experience with BetConstruct affiliate dashboard setup and can help explain how these deductions are normally configured, that would also be very helpful so I can convey it back to them.

[LuckyBuddhaAffiliates]

<1% of Total Deposits as your commission smells fishy dude

[FanieZevgolis]

<1% of Total Deposits as your commission smells fishy dude

I know, right! They’ve done the calculation manually to rectify it and have agreed to pay out any coms, but they’re struggling to get clear answers about configuration from BetConstruct support on how to fix the issue on their side, at least that’s what they’re telling me. I can understand it from their side because it’s still a fairly young affiliate programme, but they do need to get it sorted out.

[TheGooner]

Let's get a bit clearer .. because it's all a bit screwy and not what I'd expect.

However, there are two of things in the numbers that raise issues.
1/ The TAX is one - it's 43.74% on Gross - or 5.34% of total bets - or 6.08% of wins - no number seems to match the region.
2/ The HANDLE is another - just 37,338 handle on 29,103 deposits ? Did everyone just bet once as that's just 1.28x playthrough?

Unusual. it should be 8x to 10x for casino.

There are things I can explain or at least work out - because the maths fits - but they are high.
The ADMIN cost is clearly calculated as :729.92 / 4561.99 = 16% of GROSS
And EXPENSES is another : 1455.13 / 29103.38 = 5% of DEPOSITS

They are deducting 16% off any gross revenue before your commission gets at it.
And a 5% expenses cost to take deposits. It might if they're using grey card processing.

But those two numbers sound generic to me - not real costs - and they're easy to reverse engineer because they match to round numbers.

------------------

You also have a strange player base :
28 FTDs and 149 DEPS is good, but with just 29,103 total deposit value they are averaging just 195 Rand per deposit.
And possibly much lower if you have 1-2 bigger players.

And from 28 FTDs you had a bonus charge of just 50 Rand? What 2 Rand each? Or 1 player at 50 Rand? Seems unlikely.
Are FTDs really FTDs or signups for a free play ?

Finally, of course is the headline number with 29K dep value - 5K withdraws there should be 24K in the system.
That you only get a GGR of 4.5K ... which is then whittled down to 330 Rand (!!!) through expenses is not a good revenue funnel.

Also the GGR is 12.5% of total bets / turnover ... that's way too high for a casino .. where 1% to 3% might be expected.

------------------

Overall - their maths works out.

Or at least -- I see how they calculate just 331.42 commission base after Admin / expenses / and a bonus charge 4561.99 -> 331.42
At 20% you get 1/5 of f@$k all ... or 66.27 rand.

Why would you think moving from 20% to 30% is going to help much ?
Unless there was something unusual at end of month ... this is not a viable business.

-------------------

DISCLAIMER :
Based on raw monthly numbers, and little real detail we have to make a lot of assumptions.
If much of the 29K deposits was dropped in by a "whale" on the last day of the month then all the reasoning has to change.
And the affiliate will likely have a very good month ... next month.

But given what we know (not much) we can only play with the monthly numbers to reverse engineer their charges and metrics

[FanieZevgolis]

Hey Gooner, thanks for this and I see what you mean now. Breaking the previous month down like that makes the deductions a lot clearer especially the admin cost and expenses. I have sent your post to the affiliate manager and asked them to get BetConstruct to look at the setup, so I’m interested to see what they come back to me with.

As a comparison, these are the figures for the current month:

----------------------------------------------

Deposits: R26,817.00
Deposit Count: 130
FTDs: 9
Withdrawals: R23,892.00
Bets / Handle: R189,749.95
Wins: R192,442.28
Gross Revenue / Rake: -R2,692.34
Tax: R4,998.72
Admin Cost: R0.00
Expenses: R1,575.54
Converted Bonuses: R100.00
Commission Base: -R9,366.58
Commission: -R1,873.29

----------------------------------------------

Just to point something else out, this month the handle is about 7.1x deposits, which is closer to the range you mentioned. What still stands out to me is that even with the negative GGR of only R2,692.34, another R4,998.72 is being added as tax and R1,575.54 as expenses, taking the commission base all the way down to -R9,366.58.

And I agree with you 100% that, based on these numbers, it doesn’t make commercial sense. I've told them that too.

Let's see???

[TheGooner]

Just for sensibility let's check those numbers ...

DEPOSIT VALUE
------------------
Deposits of 26817 / 130 = 206 Rand each - it's small but consistent with last month.

HANDLE
--------------------
The handle ratio is harder to work out now - because we have to "guess" how much is in the system from last month
Remember we thought 24K left in and only 4.5K GGR from last month - so there might be an extra 19K sloshing about in accounts.

Still - a raw 26K deposits for 189K handle is 7.2x turnover from active players - within the range.

BONUSES
---------------------
It doubled this month to 100 Rand. Safe to say excessive bonuses are not the problem.

EXPENSES
-----------------------
This month it's 5.8% of deposits - higher than last month and also not 5% of deposits which was a very nice round number.
This is a bit of a worry - perhaps there is a different charge for different payment methods - or a charge on some withdrawals too?

ADMIN
---------------------
It's zero this month because there is no GGR.
It's nice that they don't charge you extra - although if losses carry forward (instead of being wiped out) then it should really be negative.

TAX
-------------------
What is interesting is that your account is still paying TAX on a negative overall gross.
And this month it's bigger at R4,998.72 compared to last months R1,995.51

This suggests two possibilities :
1/ You are paying a tax on gross handle / turnover although with the 2 months numbers I cannot find a constant ratio so this is unlikely.
2/ You are paying some sort of tax only on some winning players profits. But again it's not a steady ratio as nothing matches.

So whatever tax being paid is based on something more granular - perhaps individual player winnings.
Or maybe it is based on handle but at a different rate for different games, or players from different countries?

Does South Africa have a withholding tax on big wins?
Although why that would be charged to your account and not the player is beyond me.


GETTING 30% INSTEAD OF 20%
-----------------------------------
Bumping your commission from 20% to 30% did not happen.
You are still getting 20% - but that's probably OK as 30% would just be a bigger share of the losses.


#######################

OVERALL
-------------------------------
This month is more normal in terms of turnover/ handle.
But the TAX, ADMIN and EXPENSES don't behave quite as expected.
And worryingly they are all variations not working in your favour.

You really should share some more details with South African affiliates about the group.
Local affiliates will probably have practical experience with the property and it's processes.