(Update: additional reporting by Max Hotopf) The signature of US president George Bush on a shock piece of legislation will effectively outlaw payments for on-line gaming and turn a booming industry into one of potential bust.

Big players like PartyGaming (PRTY), Sportingbet (SBT) and 888 Holdings (888) have been rushed into issuing profit warnings and say they are likely to pull out of the US market which is where most of their income comes from.

All the shares were hit hard. Market leader PartyGaming saw its share price crash by over 60% before settling at 47.75p, down 59.375p or 55.49%.

On Saturday the US Congress approved The Safe Port Act which was passed to the House of Representatives and Senate which forwarded it to the White House for the president's signature which will make it law.

When passed, the act will simply make it illegal for banks and credit card companies to approve payments for on-line gambling sites.

Given that the US authorities have made their disapproval of on-line gaming clear with the arrest of Sportingbet chairman Peter Dicks in New York last month and BETonSports (BSS) chief executive in Dallas in July, the president's signature is expected in the next two weeks.

Efforts to outlaw on-line gaming in the US have been getting nowhere fast. The Safe Port Act has caught the industry by surprise in that it doesn't outlaw on-line gaming, but prevents the participants from paying for it.

Provisions in the bill, in a section labelled the 'Unlawful Internet Gambling Enforcement Act of 2006', outlaw the processing of payments between US gamblers and on-line gaming companies.