The £18.4bn approach from US sports betting company comes as domestic market enjoys explosive growth.

DraftKings, which has built its business on US daily fantasy sports, launched an £18.4bn offer for UK-based Entain, longtime competitor of Flutter, owner of its fierce US rival FanDuel.

DraftKings, the fantasy sports and betting company, has made an £18.4bn offer for Entain, setting the stage for a battle with the UK gambling group’s joint venture partner in the US, the casino giant MGM. London-listed Entain said on Tuesday that it had received two takeover offers from its US rival — one share-and-cash offer at £25 a share, which was rejected, and a second for £28 a share, £6.30 of which would be in cash.

Entain said it would “carefully consider” the newest offer, which values the company at £16.4bn before the inclusion of £2bn in net debt. DraftKings’ proposed terms would offer 22 per cent in cash and the rest in new class A common shares of the US group. The British company’s stock was valued at about £18 before news of the deal was first reported by the business news channel CNBC on Tuesday. The shares have since jumped almost 20 per cent to £22.61.

DraftKings’ shares fell more than 7 per cent in trading in New York, closing at $52.77 on Tuesday. “It’s a major signal of intent by DraftKings to become a global online gambling powerhouse.”

MGM could return with a bid for Entain since it had “meaningfully improved its capital structure” after property asset sales as part of a $17bn deal last month.

DraftKings has emerged as one of the most successful companies to list on the public markets through a special purpose acquisition company and is widely regarded as the catalyst for the subsequent boom in Spacs. The company’s market value has risen more than sixfold since it first listed at a $3.3bn valuation in April last year through a merger with Diamond Eagle Acquisition Corp, a Spac led by the veteran Hollywood executives Harry Sloan.

Analysts at RBC estimated that a combined DraftKings and Entain would control roughly 40 per cent of the US market, overtaking market leader Flutter. DraftKings has until October 19 to make a firm offer.

The offer, for a company that owns brands more than a century older than the nine-year-old start-up and has operations in 17 countries, exceeds DraftKings’ roughly $20bn market capitalisation. If the deal comes off, DraftKings, which has never turned a profit, will overtake Flutter as the largest listed gambling group in the world.

One last obstacle stands in his way: the casino giant MGM, which runs a joint venture in the US with Entain. MGM has said any deal would need its consent.

“He has global ambitions but he is in desperate need of cash flow.” Robins declined to comment, but DraftKings said the company was “incredibly well capitalised with over $2.6bn on the balance sheet as of the end of last quarter”.