Gaming revenue reports are trusted because they serve as metrics upon which the iGaming industry, (gambling and betting), is weighed. Gaming revenue is also divided into two: Gross and Net.
Get a better understanding of gaming revenue with today’s casino news, discussing important definitions and figures on the table.
That being said, let’s examine some truths about Gaming revenue. Let’s get started.
Gaming Revenue: How is it Calculated?
Online gambling, rather than sports betting, accounts for a more significant portion of gaming revenue in the US. But in January 2023, things started to change. Sports betting contributed over $1 billion to the United States’ record-breaking $5.05 billion gaming revenue for the first time, according to the American Gaming Association (AGA). Slot games, including some of the best progressive slots, significantly contribute to the edging out of online gaming over sports betting in gaming revenue. The slight increase in the sports betting revenue was by 58.2%, which was said to be the effect of the launch of betting in Ohio and Massachusetts.
Two things are considered in the calculation of Gross gaming revenues. There are:
- Total money wagered by players
- Total wins paid out to players
*Gross Gaming revenue= Total money wagered – Total wins paid out.
Net Gaming Revenue (NGR) is only a report of a casino’s earnings, excluding costs associated with licenses, bonuses, developers, etc. In this manner, you may calculate your profit.
Factors That Affect Gaming Revenue
Let’s consider some important terms that relate to this topic:
Taxation Policies
Some governmental taxation policies are quite hostile to the iGaming Industry. One of the reasons for taxation is to separate those operating illegally from the legal ones. However, the framework upon which the taxes have continually been raised is to meet government targets. The government often has revenue targets as well as how those revenues will be channeled back to developing society. Therefore, industries that are thriving often get taxed more. And without a doubt, the iGaming sector is a thriving one.
Illegal Gambling
Illegal gambling is a huge concern to the iGaming industry. Bill Miller, president, and chief executive officer of the AGA, once said that gaming’s greatest challenge is the illegal and unregulated markets. “It’s the biggest threat. Half of gambling in the U.S. happens illegally,” Miller said. “[Operators] brazenly ignore the law and present as legitimate operations. We know that Americans overwhelmingly want to play with legal operations.”
Despite the many rules and regulations to curb the creation of illegal online casino websites to protect players, some individuals still try to find their way around them. Only money wagered on legitimate online casino websites is used to determine gaming revenue.
According to the American Gaming Association, illicit gaming is estimated to be worth $44.2 billion, and more than half a trillion dollars is wagered on illegal sides and machines. Imagine the positive effects on the net gaming revenue and the expansion of the industry if this large sum of money were wagered on legal online casino websites.
Regulatory policies
The iGaming industry is highly regulated. Though on the positive side, these regulations are being put in place to create a safe gaming environment and conditions for payers. However, some of the regulations hold back the gaming industry from providing players with some exceptional gaming experience. The exceptional gaming experience can, in turn, lead to an increase in gaming revenue. Nevertheless, it’s understandable why the policies are stringent; it is to weed out illegal gambling sites.
Final Thoughts
Gaming Revenue from legal gambling sites plays an important role in government tax budgets. As a result of declining tax revenues during and after 2020’s recession, many jurisdictions across various countries expanded and encouraged gaming. And one conclusion we can draw from recent global trends in gambling is that online casino gaming is a huge market with no sign of slowing down.
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