Commercial
Bonus Ratio
Definition
Bonus and promotional cost as a percentage of gross gaming revenue over a period. The standard measure of how much of an operator’s revenue is being given back to customers to acquire and retain them, and the first deduction between GGR and net gaming revenue.
Key takeaways
- Bonus ratio is bonus cost divided by GGR; it is the largest deduction between gross and net gaming revenue.
- Typical ranges: 15 to 30 per cent for online casino, 10 to 25 per cent for sports, higher in launches and lower where bonuses are restricted.
- A rising ratio with flat revenue means growth is being bought; falling ratios follow maturity or regulation.
- Accounting treatments differ, so cross-company comparisons need the definitions.
Why it matters
The bonus ratio is the number that reveals whether growth is being bought. An operator reporting rising GGR with a bonus ratio climbing from 20 to 30 per cent is spending more of every pound it wins to keep the pounds coming; one whose ratio is falling while revenue holds is either maturing, tightening promotions or operating in a market that has restricted them. Analysts track it across quarters and against peers because it is the one promotional cost that is reported consistently enough to compare, and because it is the largest single item between gross and net revenue.
Typical ranges are wide. Online casino in a competitive regulated market runs bonus ratios of 15 to 30 per cent of GGR; sports betting runs lower, 10 to 25 per cent, with more of its promotion in price (odds boosts) that does not appear in the bonus line; launches and promotional wars push ratios higher; and markets that restrict bonuses (Sweden, Ontario, Brazil) push them lower. The ratio also moves with product mix and with the accounting treatment, since some operators net bonuses from revenue and others show them as a cost, which is why comparisons need the footnotes.
Operators manage the ratio at the segment level rather than in aggregate. The question is not whether 25 per cent is high but whether the bonus spent on a cohort returned more than it cost, which is the lifetime-value calculation applied to promotions; a rising ratio with rising cohort value is investment, and a rising ratio with flat cohort value is a promotional war the operator is losing.
Frequently asked questions
What is a good bonus ratio?
There is no single answer; it depends on product, market and stage. A casino operator at 20 per cent in a mature regulated market is ordinary; the same figure for a sportsbook would be high. The trend and the cohort return matter more than the level.
Do odds boosts count in the bonus ratio?
Often not. Price promotions reduce the margin rather than appearing as a bonus cost, which is one reason sportsbook bonus ratios look lower than casino ones.
Why does the bonus ratio fall when a market regulates?
Because regulators restrict or ban the bonuses that drive it. Sweden’s one-bonus rule, Ontario’s inducement ban and Brazil’s bonus prohibition all cut the ratio for operators in those markets.