Sportingbet said discussions with Austrian rival Bwin Interative Entertainment regarding a potential combination of the two groups are continuing as it reported an increase in earnings from continuing operations in the third quarter.
The online gaming firm admitted, however, that talks with Bwin remain protracted due to complex legal, regulatory and operational issues.
"Such discussions may or may not lead to a transaction between the two parties and the board will provide further updates in due course and when necessary," Sportingbet said in a statement.
Commenting on regulatory developments, the company noted the recent political developments in the US with regard to certain proposed legislative reforms but confirmed it is "taking no part in any reported initiatives to overturn, challenge or amend that or related legislation".
Sportingbet ceased taking bets from US residents last October following the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) which effectively banned the industry in the US.
Earlier this week, PartyGaming and 888 Holdings said they have initiated talks with the US Department of Justice attempting to seek clarification on retrospective legal action being taken against the industry.
Democrat Barney Frank remains committed to overturning the UIGEA but conceded recently that such a move currently lacks sufficient support among lawmakers.
Sportingbet said operating profit before exceptional items, share option charges and goodwill amortisation in the third quarter was 3 mln stg, compared with £0.8 million the year before.
Sales totaled £291.1 million, against £229.4 million the previous year. The comparatives discount last year's contribution from the US business.