Endeavour slumps on profit hit from Victorian pokies restrictions

afr.com:

Shares in Endeavour were down more than 10 per cent in trade on Monday amid investor concerns about the impact of new poker machine restrictions in Victoria, the largest market for the company’s pubs division.

The Victorian government on Sunday said it would force gamblers to preset daily limits on poker machine losses, and force a slowdown in the spin rate of those machines. Endeavour shares were down more than 10 per cent to $5.62, their worst performance since the company’s financial results in August.

E&P Financial analysts estimate that Victoria accounts for around 40 per cent of poker machine revenue at Endeavour’s pubs. “Whilst the devil will always be in the detail – the announcement will be negative for sentiment towards [Endeavour] given Victoria is its largest [poker machine] market operating 4700 machines,” said E&P’s Phillip Kimber in a note to clients. For every one per cent drop in poker machines revenue, Endeavour’s earnings before interest and tax would fall by $6 million.

The Andrews government is expanding strict pokies rules from Crown casino to all Victorian venues. Flavio Brancaleone

At Goldman Sachs, equities analysts Lisa Deng and James Leigh said it would be difficult to quantify the impact of the restrictions, but estimated it would lower earnings this financial year by between 0.5 per cent and 1.8 per cent.

Victorian Premier Daniel Andrews on Sunday said that the new restrictions, which are subject to consultation, would be the strongest gambling harm preventions and anti-money laundering measures in Australia. “We owe it to all Victorians to take this stance and help those experiencing harm turn their lives around,” Mr Andrews said.

Among the proposals is the introduction of mandatory