The business said it made the decision after further talks with Entain’s board.
Chief executive Jason Robins said his business was confident in its own technology and brand.
“After several discussions with Entain leadership, DraftKings has decided that it will not make a firm offer for Entain at this time,” Robins said.
“Based on our vertically-integrated technology stack, best-in-class product and technology capabilities and leading brand, we are highly confident in our ability to maintain a leadership position and achieve our long-term growth plans in the rapidly growing North America market.”
Entain, meanwhile, used the opportunity to talk up its future prospects as an independent business.
“Entain has an outstanding track record of growth having delivered 23 consecutive quarters of double digit online NGR growth, representing a three-year CAGR of 19% across 2021,” the operator’s board added.
It will now focus on further strengthening its market positions, US expansion and growth in newly-regulated markets. It will also expand into new interactive entertainment experiences such as esports, and use its broad product range to enhance customer acquisition and retention, and boost player loyalty.
“As a result the Board is confident in Entain’s ability to continue to deliver material value for its shareholders going forward,” it said.
DraftKings had made two proposals to acquire Entain last month. The first, a £25.00 per share offer, comprising cash and stock, had been rejected by its board.
DraftKings had then returned with a new proposal of £28.00 per share on 19 September.
Based on the 585,591,361 Entain shares in issue as of 30 June 2021, this would value the business at £16.40bn (€19.23/$22.40bn).
Neither was considered a firm bid though, with DraftKings initially having until 19 October to submit such an offer. This deadline was then pushed back last week.
When the deadline was extended, Entain said more clarity was needed on the value creation for Entain shareholders, including their share of potential synergies, and the terms of any technology supply agreement to BetMGM and MGM Resorts.
In addition, it called for clarity on the governance of management structure for the combined entity, and an outline of how the transaction will clear anti-trust and regulatory hurdles.
DraftKings said it may ultimately opt to make a bid again under certain conditions, such as a “material change of circumstances”.
Earlier this year, Entain was the subject of a rejected $11bn bid from MGM Resorts International, its joint venture partner for the US-facing BetMGM betting and igaming business. Entain at the time said the bid undervalued its business, and MGM opted against making a higher offer.
Upon the announcement, Entain’s share price dropped from £21.50 per share at 12:30 pm on 26 October to £19.30 at 1:00 pm.