888 Holdings, the internet casino and poker house, today allayed fears of a sharp slowdown in online gambling growth, reporting a 56 per cent rise in third-quarter revenues in its first results statement since floating in London in September.

The Gibraltar-based company said net gaming revenues rose to $70 million (£39.6m), driven by a 178 per cent increase in poker revenues.

The shares edged higher on the news, rising 1.5p to 172p in morning deals to value the company at around £580 million.

The stock has lost around 2 per cent of its value since co-founders Aaron and Avi Shaked, and Shay and Ron Ben-Yitzhak floated the company on the London Stock Exchange on September 29. Issued at 175p, the shares hit a low of 130p last month.

Today's 888 numbers provided a fillip to other players in the sector, with PartyGaming, the owner of the world’s largest poker site, PartyPoker, edging up 1.25p to 88.5p.

However, PartyGaming shares are still sharply down from their peak this year of around 175p on fears that online poker sites would be unable to maintain previous explosive rates of growth.

On September 6, PartyGaming warned that new players joining its site weren't spending as much as its core players, which triggered a sell-off in online gaming stocks.

To track PartyGaming shares click here.

In a trading statement, 888 said the number of active gamblers on its sites rose 118 per cent to 316,553 during the quarter. However, net revenue per active casino member slipped 1 per cent to $458 during a seasonally quieter time of the year.

John Anderson. 888’s chief executive, said: "Our performance for this three-month period has been particularly pleasing given that historically, trading for the casino segment in July and August is the weakest for the year."

He added: "The results for October are encouraging and the business continues to perform in line with our expectations in both poker and casino."

Numis, the broker, noted that 888's revenues came in slightly ahead of its forecasts. For 2005, the broker is targeting pre-tax profit of $61.8 million. It initiated its coverage of the stock with a "buy" rating and 213p target price.

House stockbroker HSBC is forecasting full-year net profit, before share-option charges, of around $62.5 million.

Mr Anderson envisages a strong end to the year as the company builds on a significant increase in new customer sign-ups recorded over the past month, adding that fears of an industry-wide slowdown have been overdone.

"The poker industry grew by 250 per cent last year and that’s not going to continue," he said.

"But with the world’s online poker industry seen growing by around 60 per cent this year and by only marginally less in 2006 a CEO in any other industry would exchange their right and left leg for a growth rate like ours".

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