Entain PLC, the bookmaking and online gambling group, saw its share price tumble as partner MGM Resorts International dropped plans to make a takeover offer.

US giant MGM made an approach about a full merger worth £8bn two weeks ago, which was rejected by the Ladbrokes and Coral owner.

In a statement today, MGM said it had made the decision to walk away after careful consideration and the limited engagement between the respective companies about its all-share proposal.

Entain said separately that it has a clear growth and sustainability strategy, backed by leading technology and is confident will deliver significant value for stakeholders.

“We look forward to continuing to work closely with MGMRI to drive further success in the US through the BetMGM joint venture,” it said in a statement..

Originally Entain said that the offer from MGM  “significantly undervalued” the business.

Last week, chief executive Shay Segev stunned the market when he announced he was leaving to join global sports streaming group DAZN.

Entain and MGM’s online sports betting and iGaming venture is aimed at a US market predicted to explode in size over the next few years.

By 2025, gross gaming revenue (GGR) from sports betting in the US could be a US$15.9bn business with a further US$5bn in iGaming (online casino), broker Berenberg said today ahead of the MGM news.

The broker expects Entain to be a success in the market.

“With its technology stack, the strength of the BetMGM brand, its broad market access and its established partnerships, we believe it possesses all the necessary characteristics to win a podium position in the market.”

Establishing a presence in the US market will not be cheap, Berenberg said, with losses expected for the trio of Entain, Flutter and Draftkings in the early stages, but persistence will bring substantial rewards, the broker believes.

Flutter will remain the market leader, but Entain through its tie-up with MGM offers the most opportunity, said the broker in a note.

To succeed in the US will require market access, product and technology, brand, access to customers, and marketing and promotional generosity.

In those regards, Flutter is the best positioned says Berenberg, followed by the joint venture between Entain and MGM, and third DraftKings.

Writing ahead of the MGM announcement, the broker said that on its estimates of the sports-betting and iGaming opportunity (and based on what is in the price for the US right now), Entain looks materially undervalued and is its preferred play.

Shares in Entain fell 14% to 1,217p.