Investors' lack of confidence may force low valuation for

Click to follow, the latest online casino group to float on the stock market, came up with a price range yesterday that could value the group at only £550m.

Fund managers, spread-betting companies and analysts are expecting 888 to float towards the bottom end of a wide range of between 162p and 212p set out by the company. 888 had hoped to float for at least £700m, but at the bottom end of this price range it would be valued at £546m.

888 is fighting to restore confidence in the online gambling sector after its rival PartyGaming warned last week of slowing growth in poker revenues. PartyGaming's shares collapsed by one-third after its announcement and they are now 12p below their 116p issue price.

Roger Jones, of the fund manager F&C, said: "888 has issued a very wide price range, which is necessary given the volatility that this sector has attracted. It has clearly been priced to get away."

Cantor Index has given a spread for 888's float price of between 168p and 178p, while IG Index has given a float price of between 171p and 178p.

The float means that 888's four founding shareholders - two sets of Israeli brothers - could still net as much as £207m in cash by selling their shares.

Aaron Shaked, a former dentist who came up with the idea of an online casino on a business trip to Monte Carlo, his brother Avi, and the brothers Shay and Ron Ben-Yitzhak, are selling up to 29 per cent of the company, and they also have the option to sell more shares six months after the flotation.

To try to reassure investors still reeling from PartyGaming's news, 888 said yesterday that its trading was improving. John Anderson, the company's chief executive, said: "I am delighted to report continued strong trading."

The group saw revenues of $23m (£13m) in July and August, with poker and casino revenues growing compared with monthly average revenues in the first half of the year.

Mr Anderson, who began roadshows with potential investors yesterday, will highlight 888's geographical spread and its strength in casino games. It gets 55 per cent of its customers from the US, where internet gambling is considered to be illegal, compared with more than 85 per cent for PartyGaming.

In another show of defiance to market sceptics, PokerRoom, a Swedish poker business, said yesterday it was pushing ahead with a float in London next year.

Patrik Selin, the chief executive of Ongame, PokerRoom's holding company, said: "We think that there will be only three to five top online poker/casino businesses that will survive. We intend to be one of them and believe that being listed is a very important part of that."