DraftKings makes $22.4 billion bid for UK's Entain

The British betting company Entain has confirmed a takeover bid worth about $22.4 billion (16.4 billion pounds) from DraftKings as online gambling companies seek inroads into physical betting sites and vice versa.

Entain's stock surged nearly 6% Wednesday on the London Stock Exchange and rumors of a potential deal have more than doubled the price of its shares this year.

Entain’s portfolio of sports betting and gambling companies includes some of the U.K.’s most well known brands such as Ladbrokes and Coral. The company, formerly known as GVC, claims licenses to operate in more than 20 countries.

A tie up between DraftKings and Entain faces numerous hurdles, particularly the U.K. company's partnership with MGM Resorts International, a U.S. major casino and entertainment operator.

MGM has made its own offer to acquire all of Entain, seeking access to its online technology. That offer, worth around $11 billion, was rejected by Entain this year as inadequate.

The Las Vegas company said late Tuesday that it was aware of the DraftKings bid and that any deal with Entain would require its consent because the companies' partnership, which is called BetMGM.

“MGM will engage with Entain and DraftKings, as appropriate, to find a solution to the exclusivity arrangements which meets all parties’ objectives,” the company said.

Sports gambling has exploded in the U.S. after the Supreme Court rejected laws prohibiting it in 2018. And the pandemic has supercharged online betting.

Casinos want access to proven online gambling technology. At the same time, online gambling sites are seeking entry into the physical space.

If DraftKings is successful in its bid for Entain, it stands to get access to physical betting locations run by the U.K. company's Coral and Ladbrokes divisions.

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