SPORTINGBET, the online gambling operator, is to drop Dresdner Kleinwort Wasserstein (DKW) as its broker and financial adviser and replace it with Investec, The Times has learnt.

The move follows growing concerns over the conflict of interest faced by DKW, which is also the main adviser to PartyGaming, the world’s biggest internet poker company and one of Sportingbet’s biggest rivals.

The appointment of Investec will cause surprise in the City as it is only five months since it withdrew as joint adviser alongside DKW to PartyGaming’s £4.64 billion stock market flotation.

Although Investec insisted at the time that there was no single reason — or “silver bullet” — behind its withdrawal, it was widely assumed that the dubious legality of internet gambling in the US, its biggest market, was the main factor.

But Sportingbet also derives a significant amount of business from US punters and many observers reckon that its online sports betting business is more clearly illegal than online casinos and poker rooms, which are more of a grey area.

The potential conflict of interest for DKW has been brought into focus by Sportingbet’s £790 million bid approach to the recently floated Empire Online. Empire has strong links with PartyGaming, which, despite its travails, is widely tipped to make a counterbid.

None of the parties involved would comment last night.

The crash in PartyGaming’s shares after this week’s revelation of slowing growth failed to hurt ukbetting, its smaller rival, which reported its first half-year profit yesterday.

Peter Dubens, the AIM-listed company’s chairman, said: “PartyGaming’s forecasts were more optimistic than ours. We have a 20 per cent growth forecast. We’re not seeing any downturn. We’re not seeing what they’re seeing.”

Ukbetting reported first-half profits before tax and goodwill of £500,000, against a loss last time of £900,000. The reported loss per share after goodwill fell from 2p to 0.4p.

Ukbetting’s poker and casino revenues jumped 106 per cent and the number of registered users rose 37 per cent to 308,000. The gross win margin rose from 9.9 per cent to 12.3 per cent.

Mr Dubens said the company was benefiting from a big jump in the number of people using its sports content to obtain data such as form, tips and results. In turn, many of these were accessing ukbetting’s gaming and betting sites.

Analysts suggested that ukbetting’s content business might make the group attractive to some of its bigger rivals, particularly if customer acquisition costs, a factor in PartyGaming’s troubles, continued to rise.

Paul Leyland, analyst at Seymour Pierce, said: “The stock is becoming a more clear target for cash-generative gambling companies that need to broaden their product range and gain access to high-quality traffic.”

Mr Dubens said that the surge in internet gambling could make ukbetting a possible target, adding: “We do have a lot of people knocking on our door.”

The shares added ¼p to 55½p, valuing the group at £55 million including debt.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax