PartyGaming closes French website

Rival 888 Holdings and others are also believed to have frozen efforts to target the French market. Meanwhile, authorities in Paris have requested interviews with executives from an estimated 20 companies - said not to include PartyGaming - over the legality of their marketing activities in France.

PartyGaming, which reports its full-year results this week, refused to comment on its reasons for the move.

The toughening French stance raises the prospect of a co-ordinated crackdown on offshore-licensed gambling groups similar to that launched by the US department of justice last year.

France’s position appears to be at odds with European competition rules on gambling, which many offshore operators hope will be strengthened next week with publication of a landmark judgment from the European court of justice.

But industry insiders are wary that France has stepped up lobbying efforts in Brussels, fearing that open competition - particularly from online firms based in offshore tax havens - could destroy the PMU French monopoly on which domestic horse racing relies for funding.

One industry source estimated that France could generate between 5% and 10% of PartyGaming’s continuing revenues following the closure of its US business last autumn. Another suggested France must contribute less than 5% to revenues or PartyGaming would have been forced to make a stock market announcement.

The company was one of the first online operators to provide betting services via a French language website. Last summer it acquired sports betting site Gamebookers, a well-established brand in France. Industry insiders said PartyGaming’s French business had been viewed as having huge potential for growth.