The online gaming giant 888 has reported a slump in 2010 earnings but on a positive note has suggested that bid talks with rival Ladbrokes were continuing. The poor results were blamed on falling poker revenues and increased expenditure on marketing.

The company has today claimed that its 2010 earnings before tax, depreciation, interest and amortisation (EBITDA) declined 37 percent to $28.6 million (£17.7 million).

Revenues were up 6 percent to $262.1 million.

A poll of 12 analysts expectations ranged from $21.4 million to $28.5 million with the average at $27 million

The company said trade in the first quarter of 2011 had begun strongly with average daily revenues increasing by around 7 percent on the fourth quarter of 2010.

"Following a challenging start to the year 888 finished 2010 strongly," commented 888's chief executive Gigi Levy.

"888 has begun the year with strong current trading and continues to make good progress across all segments of the business."

888 offers the opportunity to play casino, poker and bingo games online and also provides software to companies including Harrah's Entertainment Inc. It has been in talks over a possible takeover by British bookmaker Ladbrokes since December. The company 61 percent owned by the founding Israel-based Shaked and Yitshak families and any takeover would need their support.