PartyGaming's chief executive, Richard Segal, is leaving the online poker giant after just 18 months, having made nearly £20m out of the company during his short tenure.

The announcement of Mr Segal's departure came as a shock to the City and overshadowed a strong set of results from the company.

PartyGaming insisted that Mr Segal, who had been commuting weekly since the company's float in London last June, should move permanently to Gibraltar, where the group is based for both regulatory and tax reasons, but he refused after consulting his family.

Both sides agreed that Mr Segal will leave in June with a year's salary of £585,000 and 7.5 million of share options vesting over the next year, worth around £10m.

Mr Segal also sold £9.2m of shares in the float.

He is, however, sacrificing a further £20m of share options, which vest in the following two years, to avoid uprooting his young family from London to Gibraltar.

Martin Weigold, the finance director, said: "It is an absolute full-on role. There are very few industries that move at the same pace."

Mr Segal, 42, who joined PartyGaming in August 2004 after a 16-year career in the leisure industry with Rank, said: "I'm married with children aged 10 and eight, and I decided to put my family first."

He said he understood the board's decision, noting that he was the only executive director who had not relocated to Gibraltar and that more than 200 people were now based there, up from 30 at the start.

He added: "It's been a very difficult decision.

It's a company with a record of huge growth firing on all cylinders - who would want to leave?"

But he stressed his departure was "on a friendly basis. It's sad but sensible."

Some City analysts were curious that the relocation matter turned into a resignation issue and noted that John Anderson, the head of rival 888.com, commutes from Tel Aviv.

PartyGaming said the search for a replacement was under way and hinted that it might appoint someone with a "substantial internet background" rather than gaming experience.

Nigel Payne, who heads up SportingBet, said he was not in the running.

PartyGaming also unveiled a 63 per cent jump in 2005 revenues after the launch of blackjack.

Profits rose 49 per cent to $583.7m.

The group wants to buy a sports betting company and is set to offer its site in 15 different languages, with a multi-currency payment system, by the end of the year.

- INDEPENDENT

By Julia Kollewe