# What does vNGR tell me and how do I use it?

We can get an even more accurate picture of true underlying profitability if promo spend data is available

Let’s assume promo spend for the first Sportsbook is known to be 40% of hold/GGR. So its GGR was 9% and NGR 5.4%

It had a HoldCrunch of -33%, which means its vHold (reported hold/GGR minus the HoldCrunch Percentage) was 6%

Its true underlying net profitability was therefore 2.4%

- 9% (hold/GGR), x -33% (HoldCrunch) = 6%, – 3.6% (% of GGR that was promo spend), = 2.4%

We call this 2.4% number ‘vNGR’, value+NGR crunched together

Note that the promo spend is subtracted after the price distance adjustment is applied to hold/GGR. This is because we’re saying ‘ok, first let’s assume the book is equalling the leader(s) on price, what are the gross profits now? That’s the correct GGR figure from which promos should be deducted’

A note on vNGR: A Sportsbook offering uncompetitive prices and employing high levels of promo spend might reduce promo costs if it were to compete on price with the leaders. A more accurate vNGR prediction for this Sportsbook might be to apply a promo spend assumption closer to the average of other books

Whichever metric you focus on, ignoring price is to ignore a large margin variable that also affects handle share. Here’s a comparison to show why price matters so much when establishing true margin performance

- Let’s assume our second Sportsbook reports the same level of promo spend, 40% of hold/GGR. So its GGR and NGR are the same, 9% and 5.4% respectively
- It had a HoldCrunch of -5%, which means its vHold (reported hold/GGR minus the HoldCrunch Percentage) was 8.55%
- It’s true underlying net profitability was therefore 4.95%
- 9% (hold/GGR), x -5% (HoldCrunch) = 8.55%, – 3.6% (% of GGR that was promo spend), = 4.95%

- The vNGR comparison for the two Sportsbooks is therefore stark:
- Sportsbook A 2.4%
- Sportsbook B 4.95%

- Sportsbook B is more than twice as profitable as Sportsbook A. Quite some difference for two books that reported the same GGR and NGR numbers

Click here for further detail on why the HoldCrunch Percentage is an accurate reduction factor when assessing a Sportsbook’s core margin performance [links to platform page 9]