Online poker and casino business 888 saw revenues rise in the first quarter of 2012 (888.com)

888 Holdings stock plunged despite posting strong year-on-year first quarter revenues growth, amid caution from its chief executive over its ability to re-enter the US gambling market after legal concerns drove the company out in 2006.

UK-based 888, which runs online gambling services from casino games to poker, relies on European markets after the US government passed the Unlawful Internet Gambling Act 2006, which caused legal difficulties and questions for online gambling businesses operating in America.

"I'm very cautious on the US market. It will open. When it will open, nobody is sure," Brian Mattingley, 888 chief executive, told Bloomberg.

"We want to concentrate more on territories where we know they are opening."

The company had pinned its hopes on re-entering the US market through the state Nevada, which 888 believes will be the first to pass legislation that will allow licensed online gambling businesses to operate.

It hoped that once one state opens, others will soon follow.

However the latest words from Mattingley show a retreat from a US-focus, which appears to have scared investors who were hopeful of large future gains from American markets.

888 stock was down 2.88 percent on the day to £75.36 a share at 9:24am London-time.

Revenues up in First Quarter

Group revenue for 888 was up 25 percent year-on-year for the first quarter, to $94m (£58.2m).

The number of active customers on its casino and poker services increased by a staggering 87 percent, to 566,000 "driven by successful new customer recruitment and marketing initiatives," the company said.

However quarterly revenues per active casino and poker customer was $112, a 24% decrease compared to the first quarter of 2011.

Poker revenues hit $21m, a huge increase of 88 percent year-on-year.

"Our focused strategy has led to another excellent quarter, with ongoing strength in poker driving March to the highest ever monthly revenues in the history of 888," Mattingley said.

"Poker has continued its robust performance in the early stages of Q2, with our other product areas seeing an expected return to seasonal patterns.

"There are significant growth opportunities offered by the liberalisation of new markets, which will take investment to realise.

"We will continue to invest throughout 2012 in order to build market share."