As part of the New South Wales (NSW) state budget, it was announced overnight that there will be an increase in the point of consumption tax (POCT) from 10% to 15%. It follows the recent similar announcement that Queensland expects to increase its gambling POCT rate (and calculation methodology). While such changes will impact near-term earnings, the continued creep in tax rates is an inevitable characteristic of the industry evolution. We also view a more expensive operating environment as a catalyst for additional market share concentration among the more scaled operators – just as we saw with the country-wide introduction of POCTs in 2019. When coupled with a still strong structural growth backdrop, the medium-term earnings opportunity in Australia remains attractive for the likes of Flutter and Entain.