Online gambling will continue to prosper in the UK, a new report has revealed.

UK spending on internet gambling will increase by a whopping 142 per cent to reach £1.6bn by 2010, according to industry analysts Research and Markets.

British consumers spent £660m on internet gambling sites in 2005.

The report also predicts that the number of online gamblers in the UK will grow from 1.1m to 2.1m over the next four years.

"Strong growth in UK consumer spending on online gambling from 2000 was initially generated by predominantly 'hard core' gamblers," the report said.

"However, future growth will be driven by more leisure oriented consumers from 2006 as demonstrated by the emergence and growth of simpler gambling formats targeting the mass market, in particular gaming and lotto.

"For the first time gambling products are competing with other forms of mass entertainment for consumer attention and spending."

Research and Markets said the report was essential reading for online gambling operators, industry investors, technology providers and sub-contractors as well as media companies looking to generate revenues from broadband services.

In March 2006, London-based interactive betting company Leisure & Gaming reported 2005 profits of £24.1m.

Partygaming, the world's largest online gaming operator, has also enjoyed a bumper period. The Gibraltar-based group saw revenues climb 50 per cent to £172.7m in the three months to the end of June.

The promising results come amid growing fears of a crackdown on internet gambling in the US.

Earlier this month, the US House of Representatives approved a bill that would ban most forms of online gambling and make it illegal for banks and credit card firms to make payments to internet gambling operators.