How much rev share % does the affiliate programs actually payout

[Christian]

Hi guys

We have started to do some in-depth research of how much the different affiliate programs are actually paying out (and how much they are deducting).

Does any of you hold a list with detailed research (of primarily casino affiliate programs)?
- Example below with 45% rev share, but we are actually only paid around 20% rev share, when everything has been deducted.

Cheers,
Christian



Example from a new NetEnt casino of how they calculate the rev share to us:

Gross Rev = Bets-Wins
Net Rev = Gross Rev-Bonus-Jackpot Contribution-Admin fee - Chargebacks
Commission = Net rev x Affiliate Commission %

Bets = Gross amount value of all bets placed, Same as Turnover
Wins = Gross amount of all wins
Jackpot contribution = On progressive slot machines players pay a small % of each bet for the jackpot, this cost is deducted by the software provider i.e NetEnt deduct this for all players
playing Megafortune
Admin fee = 24% of (Gross rev-Bonus-Jackpot Contribution) to cover licenses and payment costs
Chargeback = If a player claims a chargeback of his CC deposit this amount will be deducted on the claim reaches Thrills.com. This is usually related to Fraudulent traffic

Example given a 45% revenue share
Bet: €11700
Wins: €10000
Bonus: €500
Jackpot Cont: €200
Chargebacks: 0

Gross Rev:€11700-€10000= €1700
Net Rev: €1700-€500-€200-€240*=€760
Commission: €760*0,45=€342

*Admin fee of 24% based on Gross-Bonus-JC=0,24(1700-500-200)=€240

[Simmo!]

That pretty much fits in with what I expected. Revshare is a percentage of profit to the casino, not a percentage of money lost. If it was the latter, there probably wouldn't be a casino to pay us: after all, both sides need to remain profitable to make a mutually-beneficial relationship effective.

I remember around 3/4 years back sitting down with a respected Microgaming affiliate manager most of you know, one who understood the operating side of the business, and we went through the costs of an online casino in some detail. The bottom line was that if their casinos had to pay more than around 22/23% of the (affiliate-referred) player's "raw" losses to affiliates then the affiliate acquisition channel became unviable (without negative carryover). It was quite amazing what costs there are involved in running an online casino I must say...I'd never really thought about that until then.

One point that I remember well was the effect that a no-negative carryover program has: the affiliate effectively gets a big % boost on top of the advertised rev share tiers.

[universal4]

Almost every program will give a complete breakdown of what costs etc are deducted and how to arrive at the netwin figure.

As long as the program is paying the stated commission rate on their netwin figure, then you are earning the stated commission %.

If you feel the way in which they determine the netwin figure, continue to research more programs. Claiming a program pays a lower percentage when in fact they do pay the stated commission is not fair to the program.

In your example above, the earnings were 45% of netwin, which my guess is what the terms state they pay.

Rick
Universal4

[TravG]

The no negative carryover is huge. I would like to see numbers over say 1 year, what the actual rev share is with neg carryover figured in. In most cases over the "long run" the player will lose. I am on the fence whether no neg carryover is a good thing or if a higher rev share would be better because of the player losing. Theoritically, as an affiliate you would want the same exact numbers as the casino because if the casino is profitable you will be profitable.

If I ran a casino I would just do a 50/50 profit share with affiliates. If the affilaites players lost money, give the affiliate 50% of the profits. If the players won money the affiliate would be in the "hole" 50% of the profits and would work that off in future months.

[Nick.RevenueJet]

Back in my poker days we'd deduct the MG network fee (17.5%) from the commissions paid to affiliates, though it was negotiable.
I have never heard of a casino deducting network fee before.

[Nick.RevenueJet]

If I ran a casino I would just do a 50/50 profit share with affiliates. If the affilaites players lost money, give the affiliate 50% of the profits. If the players won money the affiliate would be in the "hole" 50% of the profits and would work that off in future months.

So you're saying if you ran a casino you would not enable "no negative carryover"?
Also, depending on the market you face, 50% is really high, and leaves the casino with very profit margin.

[baldidiot]

Back in my poker days we'd deduct the MG network fee (17.5%) from the commissions paid to affiliates, though it was negotiable.
I have never heard of a casino deducting network fee before.

A lot of NetEnt casinos deduct it as an 'admin fee'

[Nick.RevenueJet]

A lot of NetEnt casinos deduct it as an 'admin fee'

Well I'll let my program manager know about it, perhaps we'll start doing that as well - just kidding
I wonder if it is negotiable as it was back in my day. I somehow doubt an affiliate sending 1000 players a month is OK with the casino just reducing their earnings like that.