Thank you Slotplayer.
I gave all of this a taught yesterday and a read yesterday (too much time away from a paper…) and I now see two things why a x% wager share is less than a x% rev share:
1. With rev share, the ‘no negative carried over’ can actually make you a lot of money. When -2000 is whiped out you in fact get a gift of 2000, which will never occur with wager share. When you hit the ‘good side of variance’ so that you have 2000 more in a month than ‘average’, than you nicely keep the money.
2. I read above in this thread about wager share being calculated on profit = revenue – operating costs. I don’t know which accounting standards RA uses but ‘profit’ is such a tricky concept. In a simple non tax situation:
Revenue
– Cash costs
Cash Flow
– Non-cash costs (eg deprecations)
profit
Seems to me: rev share is calculated on revenue (and in fact your x% is even higher because of the gift with ‘no negative carried over’ once in a while), while Wager share is calculated on profit= very wrong because depreciations etcetera can easily be faked. Maybe I’m wrong, I hope so, the least I would expect is to have wager share calculated on cash flow.
@Some one of RA: is it right that Wager share is calculated on profits and not on cash flow or revenue? Could you get me a copy of or a link to the audit report you use for your calculations? (can’t find the link on the site) Thanks
Also with your argumentation slotplayer, I less love the 35% Wager share deal at RA than I used to do. I could be wrong somewhere though…