Online poker companies are rapidly turning into this year's busted flush. Fears of a slowdown have today wiped more than £250 million off the value of the sector's biggest names, after one said growth has been flat and another appeared to turn its back on its main source of new punters.

PartyGaming, the web's biggest operator of poker rooms, said it has shifted all existing customers onto its own PartyPoker.com system, and has divided customers into two groups: those who join through the company's own sites, and those playing via affiliates.

Empire Online, which runs PartyGaming's biggest affiliate site, responded by saying the company must have been panicked by its own growth - a 24 per cent increase in new players over the third quarter.

"They’re showing their concerns about our dramatic growth compared to them and the entire industry," Noam Lanir, Empire Online's Chief Executive, told Reuters. "From what I’m hearing, the overall market was more like flattish."

Perhaps PartyGaming is running scared. But it is worth noting that Empire and PartyGaming are very different businesses.

Empire provides so-called "skins" - front-end interfaces that sit on top of the gambling software offered by PartyGaming and rivals such as 888.com. In exchange for attracting punters towards these skins, affiliates such as Empire will take a percentage of the pot from each hand that's dealt.

The amount of the pot held by the house for each hand (the rake) usually equates to about 3 per cent of the total up to a maximum of $3 a hand. For delivering punters to the table, affiliates such as Empire will get to keep anything up to a quarter of that rake, depending on how much is being bet by the player they provided.

All these percentages-of-percentages may not sound like much. But the beauty of running an affiliate is that it doesn't cost much either. At the interim stage, Empire took in $41 million in gaming revenue, against administrative expenses of $1 million and a cost of sales - mostly advertising - of $20.8 million.

That's a profit margin just shy of 51 per cent.

A margin like that will attract competitors - particularly if your business has no barriers to entry and negligible start-up costs. Sure enough, the affiliates market has mushroomed and the battle for customers is happening between the skins rather than the betting sites themselves.

Rival affiliates are returning their share of the pot through increasingly generous bonuses to the most valuable players; these so-called rake-back schemes are where profit margins disappear.

The problem for PartyGaming is that, by its own admission, 70 per cent of its revenues are generated by just 10 per cent of its punters. These are the high-rollers who are most likely to switch from the main site to an affiliate because of the bonuses on offer. At best, their defection will cost PartyGaming a percentage of the pot; at worst, it means losing a top-tier customer.

So, while the affiliates with their bonus schemes have delivered revenue growth twice as fast as PartyGaming's own efforts in the first half, the increasing price war to attract punters has created the firm's biggest competitor.

PartyGaming's answer, as revealed today, is to choke the companies that are driving its growth. This will be done by ghettoising the affiliates and skin users, thereby denying them the benefit of liquidity. Affiliates need a huge number of players to make all those tiny percentages of the pot add up - which is exactly what PartyGaming is denying them.

For Empire, this slow strangulation will likely mean it will have to rely on the back-end software provided by the recently acquired Noble Poker. That means any rake-back schemes will be coming straight out its own profits. And - perhaps because smaller sites have fewer inexperienced players to beat - the company may continue to lack the scale needed attract the high rollers PartyGaming is trying to retain.

And for PartyGaming, the move to cut off its main customer-acquisition driver could suggest that - after just four months as a listed company - management is already preparing for online poker to go ex-growth.

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