Business Briefing: What are the odds for 888?

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The Independent Online

When Gibraltar-based internet betting service 888.com reports its interim results tomorrow, it will face a barrage of questions on speculation that the US authorities are planning to claw back up to $120m (£60m) from the firm.

The US Department of Justice is gunning for operators under the Internet Gambling Enforcement Act. Despite its withdrawal from the US market, 888.com and its rival Party Gaming may be forced to cough up profits made before the online gaming ban became law.

Penalties on this scale could put the gaming companies out of business and 888.com will have to convince investors that it has the situation under control.

How has the company performed? Ever since it was forced to withdraw from the US last October, it has been making bullish noises and the City is awaiting a strong performance for the first half of the year.

The company is expected to report a pre-tax profit of $16.4m on revenues of $94.6m. It is estimated that full-year revenues for 2007 will be roughly $198m, up from $157m in 2006.

At the time of America's ban, over half of 888.com's revenues came from the US. But the company only reduced its headcount by 25 per cent. Analysts believe that 888.com's growth is now underpinned by a strong appetite for internet gambling in the UK, particularly among women.

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