LONDON (Reuters Breakingviews) - British punters may be surprised to learn that the owner of Ladbrokes, best-known for its chain of dingy betting shops, is the subject of takeover interest from MGM Resorts International, the $16 billion operator of plush U.S. casinos. The UK bookie, which on Monday said it had rebuffed several merger proposals, has good reasons to want more. But its negotiating power is limited. The American resorts-to-roulette group most recently offered 0.6 of its own shares for each one in Entain, the Ladbrokes parent previously known as GVC. Using MGM’s closing price on Dec. 31 that values the target’s equity at $11 billion, a 22% premium. Entain’s board, led by Chairman Barry Gibson, said the proposal “significantly undervalues” the company, effectively telling MGM Chief Executive Bill Hornbuckle to come up with something better. Investors who pushed Entain shares up 27% on Monday morning are betting he will. MGM has its eye on the burgeoning American market for online sports-betting. It would be in a much better position to grab a large slice of that business if it had control of Entain’s digital-gaming technology, which is tried and tested in markets like Britain where betting on sports has always been legal. Currently Hornbuckle has to go through a cumbersome joint venture with the UK group, in which both sides own a 50% stake. Assume Entain’s joint venture with MGM captures 10% of the U.S. sports-betting market, which Jefferies analysts reckon will eventually hit $19 billion. Valued at the same 8.6 times multiple of expected 2023 revenue as fantasy-sports group DraftKings, Entain’s half of the U.S. business would be worth $8.1 billion. That suggests MGM’s offer, which is worth $14 billion including debt, attaches little value to Entain’s non-U.S. assets. What’s more, many UK-based investors cannot hold U.S. shares, meaning they will miss out on any upside. Famed internet investor Barry Diller, whose IAC owns 12% of MGM, could potentially help by offering to buy more shares. Entain’s ability to extract a much higher price, however, looks doubtful. MGM could potentially kill any rival bids by threatening to ditch the joint venture. And the UK company’s struggling legacy business means its standalone prospects are dicey. In other words, MGM may be close to its maximum stake.