Both Reuters and Bloomberg have reported the company’s interest in the gaming and fantasy sports operator, with Diamond Eagle said to be in "exclusive negotiations" with the firm.
DraftKings may consider raising capital in another funding round if the deal doesn’t materialise, according to the reports.
Diamond Eagle was founded this year by Hollywood producer Jeff Sagansky and actor Eli Baker.
A sale could make sense for DraftKings following Flutter Entertainment’s merger with Stars Group, which partnered up rival FanDuel with fellow competitor Fox Bet.
As the new combined organisation has a potential market capital of £11bn ($14.25bn) and possesses several US-facing brands, any M & A activity may help DraftKings compete on the larger scale required by these new market conditions.
After that merger, Gambling Insider analysed DraftKings' position within the market, suggesting M & A could be on the cards.
When contacted for comment by Gambling Insider, a DraftKings spokesperson said: "DraftKings speaks to a variety of companies regarding various matters in the normal course of business, and it is our general policy not to comment on the specifics of any of those discussions."
