William Hill and GVC Holdings put in a joint bid to acquire Sportingbet which the company's board rejected since it "significantly undervalues" the company but it did leave the door open for considering a higher bid.

Sportingbet operates traditional brick-and-mortar betting shops in the UK and other worldwide locations in addition to offering a full range of online sportsbetting, casino, and poker products.

The company has used acquisitions to beef up its online operations, most notably the purchase of Paradise Poker and Australia-based Centrebet.

William Hill (which owns and operates betting kiosks and shops around the world, including in Nevada) was primarily interested in Sportingbet's Australian and Spanish assets, with GVC Holdings looking to acquire the remaining operations in unregulated gambling markets.

William Hill pulled out of Australia in early 2012 due to it being an unregulated market -- not wanting to run afoul of regulators as it sought to expand its US operations -- and the Sportingbet deal could be crucial in a quick return for the company to Australian markets.

While the Sportingbet board rejected the first offer many analysts feel that William Hill and GVC will likely be back with a sweetened offer of up to $750 million, making it one of the larger mergers of online gambling firms in recent years.

The overall online gambling market in Europe alone -- the world's largest gambling market -- is estimated to be about $9 billion per year.

However some operators struggle to continue to generate profits as some countries such as France, Spain, Italy and Denmark look to regulate and tax online gambling in a variety of ways, eating into the profit margins of operators that jump through the necessary hoops to get a license.