PartyGaming saw revenues slide in the second quarter of 2008, and blamed the fall on competition for players' leisure time with Euro 2008.

The company also lost money in its sports betting venture during the knock-out rounds of the tournament.

The group's poker business suffered after it cut the cost of its loyalty scheme, while strong competition, particularly from poker sites that accept U.S. players, led to an increase in bonuses and costs associated with some of Party's poker tournaments in the period, it said.

In sports betting, the group said Euro 2008 saw a marked increase in betting volume, but a poor run of results at the start of the tournament hit the gross win margin.

"In the group stages of Euro 2008 a run of results went with the favourites but there were a few more shocks in the knock-out rounds. Betting volumes were very high though," said Shepherd.

PartyGaming is currently in talks with U.S. authorities to find out whether it could face prosecution for taking bets in the United States before last year's effective ban on Internet gambling.

"There is no update on the U.S. situation at the moment," said PartyGaming's John Shepherd.