Gross gaming revenue (GGR) refers to the total amount wagered by players minus the winnings paid out to players. It is a key metric used in the casino and gambling industry to measure revenue. GGR provides insight into the financial health and performance of casinos, online gambling sites, racetracks, lottery organizations, and other gaming operators.
How is gross gaming revenue calculated?
Gross gaming revenue is calculated by taking the total amount wagered by players and subtracting the winnings paid back to players. Here is the formula:
GGR = Total amount wagered – Winnings paid to players
For example, if the total amount wagered at a casino is $1 million and the casino pays out $900,000 in winnings, the GGR would be:
GGR = $1,000,000 – $900,000 = $100,000
In this example, the casino’s GGR is $100,000. This represents the amount of money the casino earned after paying out prizes and winnings.
What does gross gaming revenue measure?
Gross gaming revenue measures the total revenue earned by a casino, gambling operator, or gaming establishment before any deductions for operations costs or taxes. It shows the core earnings from gaming activities.
GGR allows gaming companies and industry analysts to evaluate performance over time and compare revenue between different operators. Higher GGR generally indicates greater revenues and profits for gaming establishments.
What affects gross gaming revenue?
There are several key factors that can influence gross gaming revenue for casinos and other gaming operators:
- Number of players and visitors – More players placing bets and wagers will drive up total amounts wagered.
- House edge – Games with a higher built-in house advantage result in higher GGR.
- Bet size – Higher average bet sizes and wagers per player lead to higher aggregated wager totals.
- Time spent gambling – The longer players gamble, the more wagers placed.
- Payout percentages – Lower payout rates to players increase GGR.
- Operating costs – Lower costs as a percentage of revenue increase profitability.
- Economic conditions – Disposable income and consumer confidence affect spending on gaming.
Gaming operators use different strategies to maximize GGR based on these factors, such as offering incentives and loyalty programs to attract players and optimize floor layouts to encourage more gaming. Advanced analytics and technology also allow casinos to analyze GGR drivers and adjust operations accordingly.
Gross gaming revenue metrics and ratios
In addition to total GGR, gaming executives and analysts commonly use GGR margins, per capita metrics, and other ratios to evaluate performance:
- GGR margin – GGR as a percentage of total gaming revenue indicates the share of revenue retained as profit after payouts.
- Table GGR per table – Measures the average earning power of each table game.
- Slot GGR per machine – Indicates how much revenue each slot machine earns on average.
- GGR per square foot – Assesses revenue density and efficiency of the gaming floor.
- GGR per patron – Measures the average revenue generated per customer.
Benchmarking GGR against these types of metrics allows gaming executives to identify positive and negative trends in performance across their operations.
Gross gaming revenue by country
Gross gaming revenue varies considerably across different countries and jurisdictions based on factors such as gaming regulations, taxes, number of casinos, and consumer demand. Here is an overview of total GGR levels for select major casino gaming markets:
| Country | Annual GGR |
|---|---|
| United States | $119.2 billion |
| China / Macau | $36.5 billion |
| Japan | $37.3 billion |
| South Korea | $16.7 billion |
| Australia | $5.9 billion |
| Singapore | $3.3 billion |
| Philippines | $3.7 billion |
| Canada | $2.5 billion |
The United States generates the highest casino gross gaming revenue globally, with Las Vegas and Atlantic City being major gaming destinations. Macau in China was the world’s largest gaming market until recently overtaken by the US, while Japan and South Korea also generate substantial GGR.
Gross gaming revenue trends
Gross gaming revenue has shown an upward trajectory globally over the past decades as more countries legalize casinos and gaming activities. However, growth has slowed more recently and GGR can fluctuate significantly based on economic conditions and tourism trends.
The rise of online gambling has also impacted revenue, with online GGR increasing its share of the total market in many jurisdictions. Mobile and interactive gaming are key drivers of growth as casinos adapt to changing consumer preferences.
The COVID-19 pandemic provided a major shock to global gross gaming revenue in 2020 and 2021, with widespread casino closures and travel restrictions. Markets reliant on tourism like Macau and Las Vegas were especially hard hit. GGR has rebounded sharply in 2022 as casinos reopened.
Gross gaming revenue by state
Gross gaming revenue levels vary widely between individual states in the United States. This is driven by a mix of gaming regulations, population demographics, and the competitive landscape. Here are the states with the highest GGR based on their 2021 casino and gaming industry revenue:
| State | 2021 GGR |
|---|---|
| Nevada | $12.6 billion |
| New Jersey | $4.7 billion |
| New York | $2.7 billion |
| Pennsylvania | $2.5 billion |
| Indiana | $2.3 billion |
| Illinois | $1.8 billion |
| Missouri | $1.7 billion |
| Louisiana | $1.6 billion |
Nevada, home to Las Vegas, generates more revenue from casino gaming than any other state. New Jersey and New York are also major casino hubs. Pennsylvania, Indiana, Illinois have expanded gaming in recent years and seen rapidly rising GGR.
Gross gaming revenue for specific casinos
At the individual property level, gross gaming revenue can vary substantially between different casinos based on factors like location, games offered, marketing and competitions. Here are some examples of 2021 GGR for major Las Vegas casinos:
| Casino | 2021 GGR |
|---|---|
| Caesars Palace | $574 million |
| MGM Grand | $529 million |
| The Venetian | $500 million |
| Aria | $467 million |
| Bellagio | $358 million |
| Mandalay Bay | $245 million |
Caesars Palace generates the highest GGR of any individual casino in Las Vegas. MGM Grand, The Venetian, Aria, Bellagio also produce substantially high gross gaming revenue.
Lottery gross gaming revenue
State-run lottery organizations are a major component of the gaming industry in the U.S. and internationally. Lottery games like Powerball and Mega Millions generate billions in ticket sales annually. Gross gaming revenue refers to lottery ticket proceeds minus prize payouts.
U.S. lotteries had combined gross gaming revenue of $22.9 billion in FY 2021. The lotteries with the highest GGR are:
| State | FY 2021 Lottery GGR |
|---|---|
| New York | $3.58 billion |
| Massachusetts | $3.38 billion |
| Pennsylvania | $1.32 billion |
| Florida | $1.31 billion |
| Texas | $1.29 billion |
| Ohio | $1.27 billion |
| Michigan | $1.11 billion |
New York and Massachusetts generate the most lottery gross gaming revenue, while other populous states like Florida, Texas, Ohio also produce substantial revenue. Multistate lotteries like Powerball additionally contribute to state GGR.
Native American gaming revenue
Tribal-owned casinos and gaming facilities operated by Native American tribes also generate significant gross gaming revenue. In 2021, aggregate GGR for Native American gaming in the U.S. totaled $39 billion.
The states with the highest tribal gaming GGR are:
| State | 2021 Tribal Gaming GGR |
|---|---|
| California | $9.8 billion |
| Oklahoma | $4.4 billion |
| Florida | $3.8 billion |
| Washington | $3.4 billion |
| Arizona | $3.0 billion |
California has the largest Native American gaming market, followed by Oklahoma, Florida, Washington and Arizona. Tribal casinos have become major drivers of gaming industry growth in recent years.
Canada gross gaming revenue
In Canada, gross gaming revenue totaled $2.5 billion CAD in 2021. The largest provincial gaming markets in Canada are:
| Province | 2021 GGR |
|---|---|
| Ontario | $1.9 billion CAD |
| Quebec | $429 million CAD |
| British Columbia | $423 million CAD |
| Alberta | $252 million CAD |
Ontario generates the majority of Canada’s gaming revenue, accounting for around 80% of the national total due to its large population and venues like Fallsview Casino. Quebec, British Columbia and Alberta also have sizeable gaming markets.
Gross gaming revenue in Europe
The largest European gaming markets based on annual gross gaming revenue include:
| Country | GGR |
|---|---|
| United Kingdom | $3.9 billion |
| Germany | $3.9 billion |
| France | $2.7 billion |
| Italy | $2.1 billion |
| Spain | $1.8 billion |
The UK and Germany have the highest casino gross gaming revenue in Europe. Italy, France and Spain round out the top 5 European gaming markets.
Australia casino gaming revenue
In Australia, gross gaming revenue from slot machines and table games at licensed casinos totaled AUD $5.9 billion for fiscal year 2021. The largest state markets were:
| State | GGR |
|---|---|
| New South Wales | AUD $3.9 billion |
| Queensland | AUD $1.4 billion |
| Victoria | AUD $1.2 billion |
New South Wales, home to Sydney, generates the majority of Australia’s gaming revenue. Queensland and Victoria also have substantial casino and gaming markets.
Gross gaming revenue outlook
The outlook for gross gaming revenue growth remains mixed globally. Factors like inflation and recession risks may constrain consumer spending and discretionary income over the mid-term. However, ongoing expansion of legalized gambling and new casino development continues, especially in Asia.
Key trends that may impact future GGR include:
- Continued shift towards online and mobile betting platforms
- Expansion of sports betting and internet gaming options
- Growing competition between casinos and lotteries
- New casinos and gaming venues
- Economic and tourism activity rebounding post-pandemic
While still below pre-pandemic levels, gross gaming revenue has recovered in 2022 and 2023 is expected to show modest growth. However, a weaker economy could limit further expansion moving forward.
Conclusion
In summary, gross gaming revenue provides a key metric of earnings and profitability for casinos, gaming operators, and lottery organizations. It is driven by total amounts wagered, payout rates, and operating efficiency. GGR totals in the hundreds of billions annually across the global gaming industry. The United States, Macau, Japan and Europe represent the largest GGR markets currently. While growth has slowed, ongoing legalization and new casinos continue to expand gross gaming revenue worldwide.
