Five Net Revenue Definitions, One Month of Play

A revenue-share percentage is applied to a number the program defines. Two programs can both advertise 30% and pay very different amounts, because one subtracts bonuses and fraud before the split while the other also subtracts gaming taxes, supplier costs and bad debts. Five programs in the program directory publish their definition of net revenue in their terms or FAQ. Run one illustrative month through all five and the headline rates stop meaning what they appear to mean.

The five definitions, side by side

Each row is the program's own list:

Three things stand out before any arithmetic. Metal's definition is the shortest and the least specific: "Revenues" and "Redeems" both need defining before the formula means anything, so that is the first question to put to its manager. Four of the five name an administrative fee, and none of the four states its rate. And the 7StarsPartners list is the only one that names gaming taxes and bad debts, with bad debts deducted at the program's own discretion.

One illustrative month

Take a casino month with EUR 20,000 of gross gaming revenue, meaning stakes minus winnings. The cost lines below are illustrative, sized to be plausible, and they are identical for every program. Only the definitions change.

• Bonuses: EUR 4,000
• Game supplier and royalty costs: EUR 2,400
• Gaming taxes: EUR 1,600
• Administrative fees: EUR 600
• Loyalty rewards: EUR 600
• Payment and card charges: EUR 400
• Chargebacks and fraud: EUR 300
• Progressive jackpot contributions: EUR 200
• Bad debts: EUR 100

That is EUR 10,200 of possible deductions. Each program subtracts only the lines its own definition names, then applies its entry rate: the published rate for a new affiliate's first step.

The entry rates are the published first steps: Oshi's 30% at ten FTDs or fewer, Duelbits' 20% for one to five FTDs under clause 7.1 of its terms, Cloudbet's 25% default, and 7StarsPartners' 45% for up to fifteen casino first depositors.

What the table shows

The headline gap and the real gap are different numbers. 7StarsPartners advertises 45% and Oshi 30%: a fifteen-point difference. On this month, 7StarsPartners pays 23.4% of gross gaming revenue and Oshi 22.7%, a gap of under one point. The narrower base absorbs almost all of the higher rate. Put another way, one percentage point of headline rate is worth EUR 104 on the 7StarsPartners base and EUR 151 on Oshi's.

The same thing happens lower down. Cloudbet's 25% and Duelbits' 20% look five points apart, and they pay EUR 3,000 and EUR 3,020. Cloudbet's list takes supplier costs and loyalty rewards out first; Duelbits' list does not.

There is one more wrinkle in the Duelbits row. The program's FAQ says new affiliates start at 25%, while clause 7.1 puts one to five FTDs at 20%. At 25%, the same month pays EUR 3,775, or 18.9% of gross gaming revenue. A EUR 755 difference in one month between two of the program's own documents is a reason to get the applicable rate confirmed in writing before the first statement, and to treat the agreement, not the FAQ, as the document that governs.

The lines that move the result most

Bonuses

Every definition subtracts bonuses, and in this example they are the largest line at a fifth of gross gaming revenue. That share is not fixed. A brand that leans on large welcome packages and reload offers will run a higher bonus line than one that does not, so the same traffic sent to two brands under one program can produce different net revenue. If the report breaks bonuses out, watch them as a share of gross revenue month by month.

Taxes and supplier costs

Only two of the five definitions name supplier costs, and only 7StarsPartners names gaming taxes. A definition that deducts tax makes your income depend on the tax regime of the markets your players are in, which you do not set and which can change by statute. The EUR 1,600 here is illustrative; in a market with a high duty on gross revenue the line is larger, and it comes out before your percentage is applied.

Administrative fees without a rate

An administrative fee is usually a percentage of something. The glossary entry on admin fees works the effect through: a 10% fee turns an advertised 40% into roughly 36% of the real figure. A fee that is named in the definition with no rate attached is a number you cannot model. Ask for the rate, and ask what it is a percentage of: gross revenue, deposits or something else.

Open lists

Cloudbet's list is introduced with "including, but not limited to", so new deductions can appear without the definition changing. The 7StarsPartners bad-debt line is determined at the program's discretion. A closed list can be audited line by line. An open one can only be audited by trend: net revenue as a share of gross revenue, tracked every month, with a question sent whenever it moves by more than a couple of points without an obvious reason.

What to ask before comparing two rates

• The full definition of net revenue, in writing, with every term in it defined.
• Whether each deduction is the actual cost or a fixed percentage.
• The administrative fee: its rate, and what it is calculated on.
• Whether gaming taxes are deducted, and at which market's rate.
• Whether the monthly report shows gross revenue, each deduction and net revenue separately.
• Whether the definition can change, and how much notice you get when it does.

With those answers, convert every offer into a share of gross gaming revenue on the same illustrative month, as in the table above. That single figure compares programs fairly; the advertised percentage does not. The revshare vs CPA vs hybrid guide covers how the chain from stakes to your share fits together, and the commission calculator takes an admin fee as an input, so you can see its effect on a deal you are weighing.

What we would do this week

1. Find the net revenue definition in the agreement of every program you send traffic to, and copy it into one document.
2. Run last month's report through the definition: gross revenue, each deduction you can see, net revenue. Note any deduction the report shows that the definition does not name.
3. Pick the program with the vaguest definition and send its manager one written question about the term you understand least.
4. Next time you compare two offers, compare them as a share of gross revenue on the same month, not as headline percentages.