What Does ‘GGR’ Mean in Sports Betting?
In sports betting and the wider gambling industry, ‘GGR’ stands for Gross Gaming Revenue. It is the key metric used to measure the revenue of a gambling operator.
Essentially, GGR represents the difference between the total amount of money wagered by customers and the total amount of money paid out to them in winnings. It is the profit a sportsbook or casino makes before deducting any operational costs like marketing, salaries, or taxes.
How Gross Gaming Revenue (GGR) is Calculated
The formula for calculating GGR is simple and straightforward:
GGR = Total Wagers (Stakes) – Total Payouts (Winnings)
Think of it as the bookmaker’s “sales” or “turnover,” not their final take-home profit.
Example Calculation:
Let’s imagine a sportsbook takes bets on a single Premier League match:
- Total money wagered by bettors (Stakes): £1,000,000
- Total money paid out to winning bettors (Winnings): £920,000
Using the formula:
- GGR = £1,000,000 – £920,000 = £80,000
In this scenario, the sportsbook’s Gross Gaming Revenue for that match is £80,000.
It’s important to note that GGR can sometimes be a negative figure for a specific market or a short period if bettors win more than the operator takes in stakes. However, over the long term, the business model is designed for GGR to be a consistent positive number.
Why GGR is an Important Metric
GGR is a fundamental figure for several reasons:
- Financial Health: It is the primary indicator of a betting company’s financial performance and scale. Investors and analysts look at GGR to gauge the health and growth of an operator.
- Taxation: For regulatory bodies, GGR is often the figure upon which gambling taxes are based. Governments will levy a certain percentage of a company’s GGR as tax.
- Industry Comparison: It allows for a standardized way to compare the size and success of different gambling operators and regional markets.
In summary, Gross Gaming Revenue (GGR) is the revenue a sportsbook generates from wagers placed, calculated before the deduction of any operational expenses. It is the most critical measure of a gambling operator’s top-line performance.