LONDON, United Kingdom (Reuters):

Shares in European online gaming firms tumbled by as much as nine per cent on Monday following news that U.S. prosecutors had launched a probe into Internet gambling.

The U.S. Department of Justice has demanded information from some of the world's biggest investment banks as part of the probe into companies such as Britain's PartyGaming, banking sources said.

The move is the latest in a US crackdown on online gaming, which began with the arrest of BETonSPORTS' Scottish chief executive David Carruthers in Texas last July. Analysts said U.S. prosecutors were now probably trying to target founders and senior executives of Internet gambling companies, just as they did with the arrests of two NETeller founders last week.

Canadians Stephen Lawrence, 46, and John Lefebvre, 55, have been charged with handling billions of dollars in illegal gambling proceeds. Both face a maximum sentence of 20 years in prison.

"They're trying to make the founders sweat, as well as current management," said analyst Tejinder Randhawa at Evolution Securities.

The legality of Internet gambling in the United States was ambiguous for many years, but it was effectively banned last October when U.S. President George W. Bush signed legislation outlawing gaming financial transactions.

The big stock market-listed companies pulled out just ahead of the ban, although some privately owned Web sites such as Bodog.com are still flouting the law. But investors fear the listed gaming giants could be targeted for taking wagers before the ban.

Sunday newspapers reported that the DOJ had ordered 16 banks including HSBC, Deutsche Bank, Credit Suisse and Dresdner Kleinwort to pass on the information, with subpoenas issued three weeks ago .

All four banks declined to comment.