PartyGaming - the company behind the world's largest poker website - saw its shares dip sharply this morning despite posting an 81 per cent increase in turnover. Investors are worried that online gambling will not continue its current rapid growth.

The company, which floated in June, brought in $437m in the six months to 30 June 2005. Poker brought in $412m of this while the company's casino website made $25.4m. Ebitda before share option and IPO costs was up 70 per cent to $258m.

PartyGaming said in a statement that it expects growth to slow. Operating margins also fell as the company began to face competition in some countries.

The news pushed PartyGaming shares lower in pre-market trading. At the time of writing shares on the London Stock Exchange were down 23 per cent to 120p.

The other cloud hanging over the company is possible legal restrictions, especially in the US. Revenues from outside the US make 14 per cent of the total, up from 12 per cent last year. The company said it continued to monitor the regulatory environment particularly a possible bill before the US Senate and US reaction to recent WTO rulings calling for the US to open up to off-shore internet gambling operations.