Gross revenue deductions, net revenue, and deposits...

[nowagering]

For a while i've been asking affiliate managers to confirm how much they deduct from the gross revenue before they result in the net revenue figures we see (and get paid rev share on).

If you're not already aware, affiliate programmes deduct bonuses, license fees, jackpot contributions, tax, admin fees etc from the gross revenue of a player. Most of this is fair enough, as bonuses, license fees, jackpot contributions and tax are all expenses to the casino.

However, one to look out for is the admin fees, or fixed % which covers them all.

Most programmes have a fixed percentage they deduct from the gross revenue to cover license fees, tax, admin etc. I found this figure to be anywhere between 0%, and 35%.

0% is virtually non-existent these days, especially if you have UK traffic, as those players will be subject to 15% gaming tax.

25% is more common, which often includes the 15% UK gaming tax.

Do you know what your affiliate programme charges?

Recently, i've noticed a couple of new affiliate partners showing worryingly low net revenue figures, and they haven't been too forthcoming with their fee %.

For established partners, i can look down a player report, and see a lot of players who have deposited X and their net revenue is anywhere between 80-90% of their deposit.

But, these couple of new partners have net revenue figures as low as 15-25% of a player's deposit amount. One of them claims they do not deduct bonus costs from the gross revenue (which should mean a higher net revenue) but hasn't confirmed their fee, and another is showing net revenue figures of exactly 50% on virtually every player's deposit, apart from a handful (mostly winners).

I know there is no solid rule to this as costs vary and deposits can be very different to gross/net revenue as players might not use all their deposit, but I do like to drill down figures, and try to understand what's going on, or at least get an idea of whether I'm getting enough value out of our traffic.

Do you pay attention to any of this? What kind of difference are you seeing between deposits and net revenue with your best and worst performing partners?

[golfbettingsystem]

As you say, the programs aren't particularly forthcoming with this information and where you read between the lines the number varies quite a bit between operators. For UK customers I'm seeing between 25% and 40% of the programs where it's possible to infer a number, average is probably around 30% deductions. I guess the question here is whether this is acceptable/justified.

Point with all this is that the % revenue share is effectively diluted so we're probably averaging a 'net' revenue share of a little over 20% blended across all programs.

[casionmark]

Really interesting question.

I don't know any operators who wouldn't take off bonus funds when calculating NGR - are there any? Bonus costs can vary significantly as well across operators - I worked in the bingo industry previously and bonus costs on some operators can be as high as 60% (they were giving away 50% with EVERY deposit). In casinos I think they are normally around 20% or less. So from a £100k GGR you'd already be looking at 20K less for bonuses, £15k less POC, then licensing etc. will probably take you down to NGR as 55% of GGR. But who knows? We don't see!

What I find very hard to swallow is where we don't even see deposits. So I can work with an operator who shows sign ups, FTDs, then simply NGR and commissions. Very little transparency there at all.

I work on a very rough calculation that on a 40% rev share I should take home around 20% of total deposits (where I can see them) each month.

How does this compare to others?

[nowagering]

As you say, the programs aren't particularly forthcoming with this information

To be fair, some have it in their T&Cs (not many) and most others will tell you it if you ask them for it. Only 1 partner I have at the minute who doesn't seem to know it or can't find it out. This is the one who's NR is always 50% of the deposit amount - £10 deposit, £5 NR; £100 deposit, £50 NR; £600 deposit, £300 NR - seems very strange...

I don't know any operators who wouldn't take off bonus funds when calculating NGR - are there any?

There are some yes, or at least that's what they've told me, but I can't say they perform particularly well, so maybe they're talking BS!

What I find very hard to swallow is where we don't even see deposits. So I can work with an operator who shows sign ups, FTDs, then simply NGR and commissions. Very little transparency there at all.

I agree, only one reason why you would hide that information IMO...

I work on a very rough calculation that on a 40% rev share I should take home around 20% of total deposits (where I can see them) each month.

How does this compare to others?

That's interesting. On some accounts i'm seeing around that (the more trusted partners), but on others I'm barely seeing 5%. Even on one of my best performing accounts with a hybrid deal in place it's just under 20%. I guess it depends a lot on target market & geo though.

[Triple7]

Yes, I know, because I ask or because they show. Must say many affiliate managers are struggling to answer the question.