Ladbrokes, the high street bookmaker, disappointed the City today as it revealed that losing out to lucky football and racing punters last month led to a slowdown in its gross winnings.

Shares in Ladbrokes fell almost 5 per cent after it said its gross win rose 8 per cent over the 10 months to the end of October, with profits up by 5 per cent. This followed a May trading update at which Ladbrokes reported an 11 per cent rise in winning thanks to a spate of successes at horse-racing fixtures at Cheltenham and Aintree.

Ladbrokes particularly suffered from bets placed on the opening round of Champions League football fixtures last month, when 14 out of the 16 favourites won their games.

A strong performance in horse racing by favourites at Newmarket and Aintree last month also hit Labrokes win.

Shares fell 20p to 395p, despite reassurances from the bookmaker about trading for the early part of this month.

Christopher Bell, the chief executive, said: "While a number of football and racing results went against us in October, early trading has been in line with expectations."

Mr Bell said the bookmaker, which last week said it was considering a bid for online gamer 888 Holdings, had increased revenues from e-gaming by 17 per cent. Operating costs rose by 27 per cent over the first six months of the year, reflecting the cost of advertising campaigns, particularly during the June World Cup football tournament.

Ladbrokes gave no update on whether it would pursue a formal bid for 888 but added that it "continues to advance its strategy for growth in e-gaming and expansion into new markets".

Total winnings from telephone betting jumped 47 per cent over the 10 month period.

Leisure analysts at ABN Amro interpreted today's trading update as a "profit warning for full-year 2006". They said in an early-morning note that they expected to revise down their own forecasts to between £260 million and £265 million before tax.

"We were expecting the trading update to be a bland affair but were not quite expecting the trading picture to be so weak," ABN Amro's leisure analysts said.

However, Andrew Lee at Dresdner Kleinwort said today's figures were only "a bit worse" than expected. Mr Lee maintained his buy rating and price target of 480p, arguing the impact on earnings forecasts for 2007 would be marginal.

Richard Hunter, the head of UK equities at Hargreaves Lansdown, the stockbroker, added: "The competitive nature of the gambling industry, and the flight to online gaming (where with hindsight Ladbrokes correctly delayed its decision to enter the US due to regulatory uncertainty), continue to weigh on the shares, even though the company is looking at 888."

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