THE losing streak suffered by investors in internet gambling stocks gathered pace yesterday after comments from the founder of Empire Online sparked fresh doubts over the sector’s prospects for growth.

Shares fell across the sector after Noam Lanir, Empire’s chief executive, suggested that although his own company had seen strong third-quarter growth in both revenues and new players, the market as a whole had been “more like flattish”.

Shares of PartyGaming, which floated at 116p in June, fell 9p to 71p, while 888 Holdings lost 18¼p to 143p, down from 175p at its float price less than two weeks ago. Sportingbet was off 20½p at 286p.

Despite’s Mr Lanir’s assertion that Empire’s performance had been “much ahead of the market”, its shares were the worst performer, tumbling by 62p — or 34 per cent — to just 121p against 175p at flotation in June. Last month, Sportingbet withdrew a 270p-a-share takeover bid for Empire.

The drop in Empire’s share price came after an announcement from PartyGaming casting doubt over its relationship with the company. One of Empire’s main sources of revenue comes from directing players to poker websites run by companies such as PartyGaming.

However, PartyGaming, which owns the PartyPoker website, has been seeking to reduce its reliance on so-called “white label” poker firms or “skins”, which also include Coral Eurobet and Multipoker. Yesterday it announced plans to move its own players to a dedicated PartyPoker platform.

Although Empire said that it was too early to quantify the financial impact of PartyGaming’s actions, Charles Wilson, analyst at Bridgewell Securities, said that the statements from the two sides contained “the initial seeds of divorce”.