Contribution Margin
Revenue left after subtracting the variable costs directly tied to serving a player or segment, before fixed overheads.
Definition
Contribution margin takes net gaming revenue and deducts the direct variable costs of that revenue — bonus cost, payment-processing fees, gaming taxes or duties, game-supplier royalties, and affiliate commissions — to show what each player or channel actually contributes toward fixed costs and profit. It is more honest than top-line revenue because two players with identical NGR can contribute very differently once bonus and fee loads differ. Operators use per-segment contribution margin to decide where to spend on acquisition and reinvestment. A player can even have a negative contribution if bonuses and fees exceed the revenue they generate.
Worked example
A player with 200 EUR NGR who received 60 EUR in bonuses, cost 15 EUR in payment and platform fees and 30 EUR in gaming duty contributes 95 EUR; an otherwise identical player on a heavier bonus plan might contribute far less.
Why it matters
For a learner, it shows why revenue alone does not equal profit. For a professional, it is the right denominator for judging channel and segment economics, since it captures the bonus and fee drag that headline revenue hides.