Endeavour Shares plunge Over 10% as VIC poker machine restrictions

Endeavour’s stock experienced a significant decline of over 10% on Monday due to concerns among investors regarding new poker machine restrictions in Victoria, which is the company’s largest market for its pubs division. The Victorian government announced that it would implement measures such as preset daily limits on poker machine losses and a reduction in spin rates. This development led Endeavour shares to plummet to $5.62, marking their poorest performance since the company’s financial results in August.

E&P Financial analysts estimate that approximately 40% of Endeavour’s poker machine revenue comes from Victoria. Phillip Kimber from E&P noted that the announcement would negatively impact sentiment towards Endeavour since Victoria operates 4,700 machines, which represents its largest poker machine market. According to E&P’s calculations, a 1% decrease in poker machine revenue would result in a $6 million decline in Endeavour’s earnings before interest and tax.

The Andrews government intends to extend the strict pokies regulations currently in place at Crown casino to all venues in Victoria. Although Goldman Sachs analysts Lisa Deng and James Leigh find it challenging to quantify the precise impact of these restrictions, they estimate that it would lower earnings by 0.5% to 1.8% in the current financial year.

Victorian Premier Daniel Andrews described the new restrictions, which are still subject to consultation, as the most robust measures in Australia for preventing gambling harm and addressing money laundering concerns. Mr. Andrews emphasized the importance of supporting individuals experiencing harm and helping them turn their lives around.

The proposed reforms include mandatory pre-commitment limits on losses and carded play, the closure of gaming machine areas in pubs and clubs from 4 am to 10 am by mid-next year, a reduction in spin rates to three seconds (matching measures in other states), and a $100 cap on load up limits (aligning Victoria with Queensland and South Australia). Endeavour already offers voluntary pre-commitment across all its venues. A spokesperson for the company expressed its willingness to collaborate with the Victorian government in determining the timelines and implementation models for these proposed reforms.

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