See Partygaming's shares

The US law reforms effectively made it illegal for Partygaming to trade there.

Partygaming has been talking to justice officials to end threats of prosecution for accepting US bets prior to 2006.

Partygaming's shares fell as it also said recent revenues were disappointing and that chief executive Mitch Garber was to leave the firm.

'Constructive' talks

The firm said it could not predict the outcome of the US talks, but that a conclusion may arise in the "foreseeable future".

Any possible settlement could also remove the worries of banks that are refusing to lend to firms like Partygaming for fear of offending US authorities.

The talks, said Mr Garber, were "moving down a very good and constructive path".

Meanwhile, Partygaming said current trading had seen lower growth in revenues than expected.

But the firm - which runs the Partypoker, Partybets, Partycasino, Partybingo and Partygammon websites - said underlying earnings were still in line with expectations.

Shares in the firm ended 9% lower at 25 pence on Wednesday. At their peak at the beginning of 2006 their shares hovered around 155p.

The US move in 2006 caught the industry off guard, and set in motion sweeping changes which saw Gibraltar-based Partygaming withdraw from the US market where at the time it collected most of its revenue and profit.