Nov. 17 (Bloomberg) -- 888 Holdings Plc, the second-largest U.K. online-gaming company, said sales weakened in September because of the global economic crisis and ``extreme volatility'' in exchange rates.

Revenue was lower than in August, the Gibraltar-based company said today. Third-quarter sales rose 25 percent from a year earlier to $66 million after ``solid'' July and August sales, though the fourth quarter started ``slowly.''

The dollar strengthened about 14 percent against the British pound and 16 percent against the euro between August and the end of October, hurting sales once they were translated into the U.S. currency, 888 said. The exchange-rate movements accounted for about 95 percent of the slowdown in revenue, Chief Executive Officer Gigi Levy said in a telephone interview.

``The majority of the change we've seen in customer performance is exchange-rate driven,'' Levy said. ``We haven't seen a significant change'' in customer behavior, the CEO said, adding that online gambling was proving more resilient than wagering at betting shops and casinos.

888 fell 1 penny, or 1.3 percent, to 78 pence in London trading. The stock has slid 45 percent this year, less than the 63 percent drop by PartyGaming Plc, whose PartyPoker Web site competes with 888's Pacific Poker.

U.K. bookmaker Ladbrokes Plc and Dublin-based competitor Paddy Power Plc last week reported declines in wagers placed at betting shops as gamblers pared their spending.

Sports Bets

The number of gamblers making casino and poker wagers in the quarter, or so-called active customers, rose 3 percent from a year earlier, 888 said in the statement. Business in the first nine days of November was better than in October, mainly driven by casino and bingo sales, Levy said in the statement.

888 introduced sports-betting and bingo Web sites in the first half to spur demand, added new games and won a contract to provide betting under Sportech Plc's brand.

Sales from casino games, the main contributor, climbed 18 percent to $34 million in the quarter, the statement shows. Poker sales were unchanged at $19 million, and revenue from so- called emerging games, mostly bingo and sports betting, more than doubled to $12 million.

To contact the reporter on this story: Louisa Nesbitt in Dublin at lnesbitt@bloomberg.net.

Last Updated: November 17, 2008 12:08 EST