How much you can actually earn with a gambling-offer: consider the math of the product with admin fee in mind
Imagine that you are a casino owner and a player comes to you and decides to bet $100. Your profit as a casino owner will be determined through GGR (Gross Gaming Revenue), which is the total of all the player's bets minus his winnings. In our example, the player loses all of his $100.
However, this amount is not your net profit, as you have to take into account the Admin Fee, which usually ranges from 10% to 30%. This commission is passed on to the platform or affiliate that provided the games. To calculate your final revenue, the formula used is: NGR = GGR - Admin Fee.
In this article we will discuss in detail the role of this commission in the casino industry and how to calculate your profit.
Casino expenses and how they are sewn into the business model of the product
Every casino, whether land-based or online, faces significant costs that must be taken into account when developing a business plan. The bright and attractive appearance of an online casino hides complex operational processes and significant costs. Let's look at where the players' money goes and how these costs affect the final product.
Admin-fee: A shift in the affiliate program that is often overlooked
It is important to realize that in the field of gambling, not all the money lost by the players will be at your disposal. A significant part may imperceptibly flow away to cover the Admin Fee, a kind of fee for using certain services and products.
The Admin Fee includes various costs associated with product management: fees for using payment systems, costs for attracting and retaining players, payments to providers for royalties and other related costs. So even if the client loses all his money, you will not receive it in full — part of the funds will be spent on these expenses.
Sometimes, in affiliate programs, an increase in the Admin Fee may occur without warning — this phenomenon is called "shading". Previously, this practice was quite common, which could negatively affect the income of affiliates.
To avoid unexpected expenses, it is important to discuss with your manager in advance the exact formula for calculating the share of income (RevShare) and find out exactly what costs are included in the Admin Fee. Feel free to ask questions — it's better to clarify than to remain in the dark. This will help you better understand the terms of cooperation and avoid unpleasant surprises in the future.
How often do affiliates complain about the shake of their partners
Affiliate programs try to minimize conflicts in relations with affiliates, but such situations still happen. Dissatisfied affiliates often express their opinions through feedback on forums. However, there are examples when the affiliate program (PP) and the affiliate managed to reach a compromise, which indicates the reliable reputation of the PP and its ability to resolve controversial issues.
Such examples usually indicate that the affiliate program is ready to engage in dialogue and seek solutions, which is especially important for building long-term and mutually beneficial relationships with affiliates.
In this case, we cannot say exactly how the specific case ended, but it is known that the issues on the part of the affiliates were resolved. This is one scenario, but there are many other reviews where problems remain unresolved. Examples of such situations include an incomprehensible RevShare payment scheme, overly lucky players, despite the standard RTP for slots, and other signs indicating that "something went wrong."
When such issues are not resolved, it raises doubts about the transparency of the affiliate program and can significantly undermine the trust of affiliates.
Affiliate's profit taking into account the Admin fee
It is quite simple to calculate the affiliate's profit, taking into account the Admin Fee, if all the necessary data is known. Let's look at this with a specific example to visually see the process of forming the calculation.
Let's say you brought in a 45% RevShare player. The player made a deposit of $ 1,000 and received a bonus from the casino in the amount of $ 500. Over time, the player lost the bonus money and half of the deposit, and withdrew the remaining $ 500.
Now let's look at what it looks like in terms of expenses:
- The commission for game providers is on average 13%, which in our case will be $ 130 (13% of $ 1000).
- The commission for making a deposit is on average 6%, that is, it is another $ 60.
- The average withdrawal fee is 3%. Accordingly, from the withdrawal of $ 500, the commission will be $ 15.
Now let's calculate the total casino expenses from the remaining $ 500:
$ 130 (providers) + $ 60 (deposit) + $ 15 (withdrawal) = $ 205.
But this is not all the costs. The remaining amount — $295 — should be divided taking into account RevShare. The affiliate is paid 45%, that is, $ 132.75. The remaining $162.25 remains with the casino.
The final picture is as follows: more than half of the funds ($ 205 out of $ 500) are spent on expenses, therefore it is incorrect to consider the casino as an exclusively superprofitable business. It is true that significant amounts are spent in large casinos, but for every income there are also large costs. This explains why in some cases managers refuse high rates for minimum deposits, whether using RevShare or the CPA model.
Conclusion
It is important to realize that the actual Admin Fee may differ significantly from the stated data, especially if the player uses bonuses. This can have a significant impact on the affiliate's final income.
Bonus programs such as free spins or additional funds for deposits increase the volume of bets, but also lead to additional costs for the casino. These costs are often not taken into account in the initial commission calculations. Thus, if a player actively uses bonuses, the real Admin Fee may increase, which reduces the total income that the affiliate receives from the attracted player.
This is another reason why it is important to study the terms of affiliate programs in detail and clarify with managers in advance how bonus programs affect the final calculations and how they will be reflected in the final profit.