"Challenge extended.” “Deal!” “Challenge accepted.”
Could someone tell me please what does "challenge extended" literally mean here?

Question

Answer

"Challenge extended.”  = I dare you to to something . Example: gambling, a race, a duel.
“Deal!”  =  I  agree 
“Challenge accepted.”= I accept your dare and I will do it.

Answer

Nothing special. The two words go together.

You "extend" a challenge to your opponent. That is how you do it.

Answer

hm... if you would be playing a card game for money.... that could mean something " the bets are raised"... anyway i think it means that a challenge/ game continues ...