888 has reduced the price of its shares ahead of its floatation later this month amid concerns that the online gaming market is running out of steam.

The e-casino today set the price of its shares at between 162p and 212p a share - valuing the company at between £546m and £715m.

When plans to float the Gibraltar-based business on the London Stock Exchange (LSE) were first announced £700m was touted as a fair figure for the business. Now, though, this is at the top end of the company's valuation.

The loss of confidence in online gaming has been spurred by PartyGaming, which floated for £4.6bn earlier this year.

For while PartyGaming recently posted an 81 per cent increase in turnover, it warned that online gambling would not continue its current rapid growth.

As a result, shares in PartyGaming tumbled by a third.

In a bid to inject some confidence ahead of its IPO 888 reported that net gaming revenue in its casino segment grew by 14.2 per cent in the first half of 2005 compared to H1 and predicts that this part of the business will continue to grow.

And while its poker gaming has seen "very strong growth of 226 per cent" in net gaming revenue in H1 05, it also accepts that this is not sustainable. ®