ALH is on the PR front foot in the gaming reform debate, announcing it will reduce room hours in Victorian venues ahead of the deadline and calling for more uniformity between states.
In a press conference last week Endeavour Group (ASX:EDV) chief executive Steve Donohue broke the news the company would be transitioning its pubs in Victoria to 18-hour trading days, but while conceding the measure will have a “direct impact” on a number of staff he would not comment on potential redundancies or how the changes might affect earnings.
Australian Leisure & Hospitality (ALH) has around 90 pubs in Victoria amongst its national fleet of circa 350, and its thought the rostering for about 100 employees in the southern state will be affected.
Upping the ante on recent gaming reforms, Premier Andrews’ government recently mandated that by mid-2024 pubs and clubs will be forced to close gaming rooms between 4am and 10am.
The possibility of further measures was also flagged, notably slowing the spin rate on machines, reducing the feed-in limit from $1000 to $100, and most significantly venturing the introduction of a card-based mandatory commitment scheme that would force gamblers to preset daily limits on poker machine losses.
Last week Donohue explained ALH would voluntarily reduce its Victorian machine area hours by 31 August. It was noted its EGMs in Victoria already operate on the reduced spin rate and that the company supports the lower feed limits; a measure that requires regulatory change to be implemented.
Donohue also disclosed that he has corresponded with other states, proposing a more uniform approach to the changes being suggested by different stakeholders.
Anti-gaming advocates have been quick to suggest Victoria’s reforms may soon spread to NSW, seeming to forget that now Premier Chris Minns was not swayed by the pressure rising around the former Premier’s proposed sweeping reforms.
Last week Minns announced the somewhat overdue formation of a 16-person panel to oversee the trial of cashless gaming cards that was promised in the lead up to the March election in NSW. The panel is slated to present its findings next year.
Minns also announced last month an upcoming ban on gaming room signage outside pubs, and a reduction of the feed-in limit of NSW machines, from $5000 to $500.
The news by EDV coincided with its worst day of trading on the ASX on record, closing down 9.9 per cent to $5.64, and a company record high of 24 million shares traded.
It was suggested that investors were concerned what impact a potential mandatory commitment scheme might have on EDV’s Victorian pubs.
Victoria generates around 40 per cent of the group’s EGM revenue, and E&P Financial retail analyst Phillip Kimber commentates that for every one per cent EDV EGM revenue falls, its EBIT would fall $6 million.
But Donohue downplayed the speculation, clarifying that the group’s change plans were “not a price sensitive announcement” for Endeavour.
Beyond owning ALH, Australia’s largest pub operator, EDV owns retail liquor brands Dan Murphy’s, BWS and Jimmy Brings.
Spun off from parent Woolworths (ASX:WOW), the company listed mid-2021 at a starting price of $6.02 per security.
After reaching a high of $8.32 in August last year, and quick plunge after this policy announcement, EDV shares rebounded, closing last week at $6.04.