What is NCO?

Negative carryover, abbreviated NCO, is a clause in some affiliate programmes whereby a month's negative commission balance is carried forward into the following month rather than being reset. A negative balance arises under revenue-share deals when the players an affiliate has referred win more than they lose, so that net gaming revenue for the period is negative and the affiliate's share of it is below zero. Worked example: an affiliate is on a 40% revenue-share deal. In month one, their referred players go on a winning run, producing net gaming revenue of -1,250 for the affiliate's account. With NCO in force, the affiliate earns nothing that month and carries the -500 share (40% of -1,250) into month two. Even if month two's players generate a healthy positive result, the affiliate earns nothing until that -500 deficit has first been recovered. Without NCO, the negative balance would reset to zero at month end, and month two would start fresh. Why it matters: NCO is one of the most contentious terms in affiliate contracts because it transfers the volatility of player luck onto the affiliate, who has no control over individual outcomes, and it can suppress earnings for months after a single high-variance period. The standard advice is to negotiate it out or to favour programmes that reset balances to zero each month. The common mistake is signing a revenue-share agreement without reading the carryover clause and only discovering its impact after a losing month for the operator. See also NGR related net gaming revenue, revenue share and CPA.