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Daily fantasy sports return to New York

Daily fantasy sports are once again legal and available in New York.

The state's gaming commission awarded temporary permits on Monday to five of the biggest daily fantasy companies — DraftKings, FanDuel, Yahoo, FantasyDraft and Draft — allowing them to resume operations in the state immediately.

The announcement is in accordance with a law signed by Gov. Andrew Cuomo last month that designates the competitions these companies offer "games of skill" and therefore not in conflict with a gambling ban written into the state constitution. It also tasked the gaming commission with licensing and policing the industry.

The timing couldn't be better for the companies, as the NFL season kicks off in just a few weeks.

“While the Commission continues work on formal regulations for these games, these temporary permits get companies up and running in New York State while assuring resident players that safeguards are in place,” commission head Robert Williams said in a statement.

The news brings an end to a closely watched battle between New York state regulators and the burgeoning industry over whether its business model should be considered illegal gambling.

Unlike traditional fantasy sports, in which groups of friends set up leagues with season-long rosters, daily fantasy players pick separate teams before each professional sporting event then compete for high-stakes cash prizes with people all over the country.

While this style of play has been around for at least decade, it wasn't widely known until last fall, when venture capital-flush startups DraftKings and FanDuel spent hundreds of millions of dollars to make their brands ubiquitous on TV airwaves.

The advertising blitz also caught the attention of many government regulators in states across the country, who grew suspicious of the lack of regulation in the space.

New York state attorney general Eric Schneiderman was the first to act. His office opened an investigation into the two industry leaders after news broke that a DraftKings employee who was playing on a rival site had access to proprietary data on how customers had drafted.

The employee was eventually let off the hook, but Schneidermann shifted focus to the bigger question of the game's legality with lawsuits and cease-and-desist letters that forced the two sites to shut down operations in the state. Several state agencies across the country followed suit.

While the industry's legal status is still being contested in many of those states, the New York law was seen as an emblematic victory because of the size of the market and the role its government played in leading the charge.

"We are thrilled to be able to bring DraftKings back to millions of New York sports fans," DraftKings CEO Jason Robins said in a statement on Monday. "On behalf of everyone at our company, thank you New York and welcome back to DraftKings!” 

Schneiderman still has an open lawsuit against FanDuel alleging that its advertising misled customers.

The New York law was also pushed by heavy lobbying on the part of fans as well as media companies and professional sports leagues, many of which are invested in the industry.

In what has become the standard playbook for tech startups facing the threat of regulation, the industry rallied its customer base to send letters to politicians, ran aggressive ads making its case and held rallies in support. 

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