September 6, 2017


DraftKings CEO Jason Robins knows how people feel about how many ads they ran in 2015.

“It was just too much,” Robins said. “It was over saturation. People were complaining. They were seeing too many ads. It was beyond the level that I think is healthy and good for the long term.”

That said, get ready for round two. With the NFL about to start its 2017 season and daily fantasy ready to re-emerge from two years of controversy and regulatory battles, there’s a fresh push from daily fantasy websites on the way.

“Tell me what you think in a few weeks,” Robins joked.

Daily fantasy is ready for its comeback. A couple years after DraftKings and FanDuel burst on to the scene with an absurd amount of ads, the two companies are set to re-enter the public consciousness. Legal troubles are (mostly) behind them, a possible merger is dead, and ad budgets are restocked, though maybe not to quite the extent they were.

“It’s obviously been a verity turbulent two years but now [we’re] very well positioned for growth and certainly we’re very good on the regulatory side,” said FanDuel CEO Nigel Eccles.

“We still think it’s very early stages in daily fantasy sports,” Eccles said.

Turbulent might be putting it mildly. After the two companies outspent the beer industry on ads meant to attract new customers, a regulatory battled called into doubt whether fantasy sports for money was legal—and if it ever would be. States began to ban daily fantasy competition. The industry was also hit by a scandal that alleged employees of the two companies had colluded to win major prizes.

The controversy centered on the issue of money. Daily fantasy lets users pay money to enter competitions that then have cash payouts, not terribly different to online poker. Users choose teams of players based on pre-set salaries. Whichever teams score the most points by playing well in real-life games get a cash prize.

If that sounds like gambling to you, you’re not alone. Plenty of state governments and regulators felt the same way and began to crack down. The ads suddenly disappeared. The companies remained open for business, but stopped operating in numerous states and ceased running for-money competitions in others.

The companies eventually prevailed, with lobbying efforts successful in getting most states to legalize the game, but the damage was done. Weaker from their time on the sidelines and having already seen just how brutal competition could be, DraftKings and FanDuel explored a merger that was just about done—until the U.S. government’s antitrust regulator said in July that it would block the deal. The merged company would have had 90 percent of the daily fantasy market.

Now, it’s gametime. There’s fantasy (daily and season-long) for all sorts of sports, but the NFL reigns supreme. Hence the return of daily fantasy ads.

“This is the time of year when we have the most new customers join and customers that are NFL-only reactivate, so it’s very important that we have effective advertising,” Robins said.

To attract new customers, both companies are rolling out new game formats and promotions, such as a billion-dollar challenge from DraftKings to make the perfect lineup. The goal is to grow beyond the usual sports bros that are daily fantasy players and tap a larger population looking for a more casual and social experience. Regular fantasy sports typically last a whole season and are estimated to draw around 60 million participants, most of whom play through established companies.

“I view our principle competitors as ESPN and Yahoo. They by far have many more users than we do,” Eccles said.

Both Robins and Eccles—who at one time were going to be CEO and chairman of the merged company, respectively—said they believe daily fantasy is still in its early stages, and that coming up with new games and a better user experience will be key to future success.

“I think that the overall kind of product itself is still very much in the early stages,” Robins said. “It is to me the same as the first few years of when season-long fantasy hit the internet. It was just a different product than it is today.”

Let the games begin.

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By Jonathan D. Salant

NJ Advance Media for

Updated on September 6, 2017

WASHINGTON — A powerful lawmaker and the casino industry have weighed in on the side of the Garden State as the U.S. Supreme Court decides whether to allow New Jersey to legalize sports betting.

Rep. Frank Pallone Jr., the top Democrat on the House Energy and Commerce Committee, and the American Gaming Association made their arguments in briefs filed before the high court, which agreed in June to her arguments on whether sports betting should be legalized at racetracks and casinos in New Jersey.

Pallone, D-6th Dist., argued that the federal ban violates the 10th Amendment’s grant of powers to the states.

“By ordering New Jersey to maintain prohibitions on sports gambling that its state legislature has considered and repealed before, Congress is coercing the State of New Jersey to govern according to Congress’s instructions,” wrote Pallone, who has introduced legislation allowing states to legalize sports betting.

The casino trade group filed its own brief, arguing that the federal ban has had “the perverse effect of pushing an enormous market underground by way of federal decree while stamping out state and local efforts to adapt their own laws pursuant to their own citizens’ wishes.”

The gaming group has launched a nationwide campaign to legalize sports wagering, saying $150 billion a year is bet illegally.

The court will be asked to rule on the legality of a 1992 law that banned sports betting in all but four states, Delaware, Montana, Nevada and Oregon.

New Jersey officials have sought ways to get around the law, seeing legal sports betting as a way to help the state’s horse racing industry and Atlantic City’s struggling casinos.

Every effort has been met with opposition from the National Collegiate Athletic Association and the four major professional sports leagues — Major League Baseball, National Football League, National Basketball Association and the National Hockey League — even as some of the leagues have partnered with daily fantasy sports operations.

The Supreme Court will hear an appeal of an August 2016 decision of the U.S. Third Circuit Court of Appeals in Philadelphia, which ruled, 10-2, that sports betting was “clearly and completely legally prohibited” under federal law.

Jonathan D. Salant may be reached at Follow him on Twitter @JDSalant or on Facebook. Find Politics on Facebook.

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SEP. 5, 2017

The fantasy sports space continues to grow, despite the expansion of regulations on the sector at the state level. Here’s an update on the industry, along with how associations are helping things along.

Didn’t it feel like fantasy football was everywhere a few years ago? Certainly the commercials were.

But here’s the thing that you might not have realized if you’re not a sports fan—it’s still everywhere, and it’s still growing. According to a June press release from the Fantasy Sports Trade Association, it generates $7.22 billion in revenue annually and counts 59.3 million players in the U.S. and Canada. Pretty solid numbers, right? FSTA President Paul Charchian certainly thinks so.

“The fantasy sports industry’s continuing growth demonstrates consumers’ passion for the hobby and their desire to play with friends and family,” Charchian said in the release. “We continue to see innovation that broadens the appeal of fantasy sports and data that shows tremendous gains in the scale of participation and economic impact.”

But a lot’s changed since the heady days of 2013 and 2014, when the activity started to hit a peak in mainstream consciousness. Since then, controversy hit in a big way, with the approach compared closely to gambling.

It’s still happening, too. Earlier this year, the two largest players, DraftKings and FanDuel, announced they were merging. Then, after the Federal Trade Commission spoke out, they weren’t.

All the additional attention has led to an increased number of regulations at the state level.

Just recently, New Jersey launched regulations on the activity—complete with a 10.5 percent tax on winnings garnered by a company. They weren’t the first: According to Bloomberg BNA, 14 other states have taken steps to legalize the industry, with nine of those states implementing taxes or fees on operators. These regulations are generally new—when Virginia regulated fantasy sports in March 2016, it was the first state in the country to do so.

The surge in regulations was no accident, however—FSTA basically encouraged it by introducing its own model legislation designed to ensure that states had a starting point for regulations.

But the regulatory specter did create some uncertainty in the industry, especially as it ensured the advocacy game would take place in a variety of venues at once. Before the 2016 FSTA annual meeting, attendees were unsure of the way that regulations would affect the industry.

“I think a lot of people were walking in wondering if they were walking into a morgue,” Charchian told ESPN in January of 2016. “But one of the recurring themes I got from attendees was how happy they were that the energy and positivity and excitement that is sort of inherent in fantasy sports is all still there.”

Of course, not all fantasy sports companies have the reach of FanDuel or DraftKings, and last year, smaller players in the fantasy sports space created a group of their own, the Small Businesses of Fantasy Sports Trade Association, in an effort to maintain an advocacy voice in the regulatory efforts taking place in states around the country.

“We felt that a stronger voice was needed to speak on behalf of the small business owners of fantasy sports,” SBFSTA cofounder Alex Kaganovsky told Inc. last year.

At this point, some things are still in flux—while 15 states now have regulations signed into law, others have banned such play outright, and others still are trying to work out the details of any proposed legislation.

For now, though, most of the U.S. can get in on fantasy sports action if they’d like.

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NJ Spotlight


Besides translating into millions of much-needed dollars, new rules also put in place much-needed consumer protections

Large-scale fantasy sports games offered online by websites like DraftKings and FanDuel have been growing in popularity across the country in recent years, and now New Jersey has joined the ranks of states that have enacted laws to both regulate and tax the operators of those games.

The recent change in policy in New Jersey comes just in time for the start of the latest National Football League season, and even though initial projections are meager, it will create a new revenue stream for the perennially cash-starved state budget.

The new state law requires the companies offering the large-scale fantasy games to purchase an operating permit from the state and pay an operations fee equal to 10.5 percent of quarterly gross revenue. It also establishes substantial penalties to punish anyone caught tampering with the outcome of a fantasy game or operating one in New Jersey without a permit, but importantly, that does not apply to the more modest fantasy sports games that are regularly played among family and friends.

Sponsors of the legislation that led to the new law praised its recent adoption by Gov. Chris Christie. They said New Jersey residents have been playing games offered by the fantasy-sports companies for years, but without proper consumer protections put in place to ensure those games, which can generate lucrative payouts for winners, are being run fairly. The adoption of the new law, meanwhile, has also been welcomed by officials from the leading fantasy-sports websites as it now firmly establishes the fantasy games’ legality in New Jersey.

Fantasy fine print

Invented decades ago by sports-statistics enthusiasts, fantasy-sports games generally involve the tracking of the statistical performance of a group of players selected by a virtual “general manager,” with different formats allowing for season-long competitions and even those lasting just one day. In fact, in recent years websites like DraftKings and FanDuel have begun to popularize several types of daily fantasy games, including those using a salary cap to enhance the competition by preventing general managers from stacking their virtual teams with only the best players at every position.

The online format has also allowed the pool of potential daily fantasy general managers who compete against one another to expand dramatically, compared with the more traditional seasonal leagues that are played primarily for bragging rights among family, friends and coworkers. Although online players typically pay only a few dollars to join a daily fantasy contest, prizes can rise into the millions, making the nationwide games lucrative for both the websites and the winning players.

More than just luck

But as daily fantasy games have taken off in popularity and become a significant industry nationally in recent years, questions have also been raised about whether the contests that are played for cash prizes should be considered a form of sports betting, which is still banned in most states, including in New Jersey, despite the state’s recent attempts to loosen federal law. Proponents of the daily fantasy games maintain that success requires much more than luck as the most sophisticated general managers spend hours going over lineups and matchups, assessing trends, and even tracking the likely weather conditions at stadiums across the country on game days.

A federal Internet-gambling law passed in 2006 included an exemption for fantasy contests that rely on the performances of real players participating in real games, but several states have taken the position that daily fantasy contests where cash is at stake are illegal sports gambling and have prohibited them from operating.

New Jersey’s new fantasy-sports law officially establishes the legality of the large-scale fantasy games in the state when cash prizes are offered, as long as the operators follow the new regulations and pay the costs of obtaining operating permits. The law defines a large-scale fantasy sports activity subject to state regulation as a “contest with an entry fee in which a participant owns or manages an imaginary team and competes against other participants or a target score for a predetermined prize with the outcome reflecting the relative skill of the participants and determined by statistics generated based on performance by actual individuals participating in actual competitions or athletic events.”

Financial guidelines

The new law also establishes financial guidelines like requiring the companies to conduct audits and maintain monetary reserves, and it allows them to partner with state-based casinos and racetracks. The law also prohibits players who are under 18 and bans the offering of any fantasy games linked to high-school sports.

Penalties for tampering with the games range from up to $50,000 for individuals to up to $200,000 for operators. Fines of up to $25,000 and up $100,000 would also be established for operating fantasy games in New Jersey without a permit.

Nonpartisan analysts from the state Office of Legislative Services have estimated the bill could generate at least $6.6 million in annual revenue for the state net of the costs it will take to regulate the fantasy games. The analysis was based on national estimates of how many people are playing fantasy sports games and how much money players typically spend in a given year. In all, the analysts estimated the fantasy games could become a $625 million industry in New Jersey, and that 10 percent of that amount would generally be kept by the operators as entry fees, making it subject to the new state permitting charges.

Assemblyman Ralph Caputo (D-Essex) suggested the new law now puts in place strong consumer protections that bring the state up to date as the large-scale fantasy sports have evolved into a lucrative industry.

“This helps keep the games honest and consumers protected,” said Caputo, a primary sponsor of the legislation enacted by Christie.

In the Senate, the measure was sponsored by longtime Sen. Jim Whelan, a Democrat from Atlantic County who died unexpectedly on August 22, just days before Christie signed the bill into law.

A statement issued by DraftKings and FanDuel also highlighted the consumer-protection issue, saying New Jersey’s new law now puts the state “at the forefront of consumer protection nationally.”

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The Boston Globe
JULY 30, 2017

Daily fantasy sports companies have long held fast to the position that their customers, who put money on the performance of real-life athletes, are not gambling because they are playing a game of skill, not luck.

Now, members of a state commission set to vote Monday on a key report about the young industry say that distinction might not matter. So long as the game has money on the line, they say, it’s gambling under Massachusetts law.

The highly charged designation is a crucial one to DraftKings Inc., the Boston-based industry leader, which argues that such a move could imperil relationships with business partners, bring tax headaches, and potentially lead to conflicts over its status under federal law and in other states.

Chief executive Jason Robins said in a letter to the commission studying online gaming and fantasy sports that the panel’s draft report rests on shaky legal reasoning.

“The draft report’s conclusion that all games played for money are ‘illegal gaming’ leads to impractical and absurd results,” he said. “Because the Boston Marathon requires an entry fee, involves an event and offers prizes, it would be considered ‘illegal gaming.’ ”

For now, daily fantasy sports are regulated in Massachusetts under a set of consumer-protection rules imposed in 2016 by Attorney General Maura Healey that include prohibiting players under age 21, banning contests based on college sports, and limiting advertising.

And the Legislature passed a temporary measure last year that allowed those paid contests to continue while a commission develops recommendations that clarify the legal standing of daily fantasy sports. In its draft report, the commission suggested the Legislature enact a law that expressly legalizes the games and give the Massachusetts Gaming Commission additional oversight.

It leaves other specifics, such as taxes and governance, to lawmakers.

Senator Eileen M. Donoghue, the commission’s cochair, said the proposal is good for the daily fantasy sports business, in which participants can pay to enter competitions and win cash prizes, based on the performance of the players they select.

“The recommendation is designed to obviously give a clear path for the industry to operate,” the Lowell Democrat said. “It not only legalizes but legitimizes them under state law.”

Stephen Crosby, chairman of the Massachusetts Gaming Commission, said defining daily fantasy sports as gaming “doesn’t make it bad.”

“It just makes it what it is, in that it needs not just the consumer protection regulations that the attorney general has put out there, but it needs other sets of protections,’ said Crosby, citing issues including digital security, the handling of money, and support for problem gamblers.

But in his letter to the commission, Robins argued that the “skill vs. chance distinction” has long been used in Massachusetts to determine if an activity is gambling, and how it should be regulated. Moreover, he expressed concern that having Massachusetts define daily fantasy sports as gambling would give ammunition to opponents of daily fantasy sports in other states.

The commission broadly reviewed other emerging elements of online gaming and said some additional legalization is “inevitable.” But the draft report does not recommend immediate action on those.

The draft report also said eSports, or competitive video game playing, “could be a unique and well-timed opportunity to form partnerships that would benefit economic development in Massachusetts.”

DraftKings declined to comment on what it would do if the change becomes law. The proposal, however, could touch off another round of expensive government affairs work for a company just off a significant defeat. DraftKings and its chief rival, FanDuel Inc., this month dropped their plan to merge, amid objections by federal antitrust regulators.

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Editorial Board
The Christian Science Monitor
AUGUST 2, 2017

Daily fantasy sports has boomed into a $3 billion industry in recent years. Yet many states still haven’t decided if this online contest between imaginary rosters of real athletes in professional sports is a game of skill or gambling. A handful of states have banned it while 14 states simply regulate it, mainly for the tax revenue. About 20 more are deciding what to do. Amid this national debate, a state commission in Massachusetts has issued a decision that may help clarify the issue.

The panel says daily fantasy sports is online gambling – no matter what the level of skill. A wager placed on an uncertain event as a form of amusement is still a wager. And it deserves strict controls to prevent all the potential abuses of any gambling enterprise.

The lengthy decision is upsetting for DraftKings and FanDuel, the two companies that dominate this industry. They don’t want other states to accept this reasoning as it will mean licensing and taxes similar to those imposed on casinos. The two firms contend that fans of daily fantasy sports rely mainly on their knowledge to win money. The Massachusetts panel, however, decided that there can be no balancing test between chance and skill for such a game. Its opinion will now be considered by state legislators.

Trying to use statistics to determine the level of skill for a game played for money – as many courts have tried to do – ignores the fact that even the most skilled can lose and the less skilled can win. In professional sports, an unexpected bounce of a ball can defy a statistician’s prediction.

Waging money in fantasy sports is akin to betting with a friend on the point spread of an NFL game. And in most states, sports betting remains illegal.

What really worries some state officials, however, is that any form of recreational gambling, whether real or fantasy, can have negative social consequences, either in a rise of crime or for problem gamblers. Even before this decision, the Massachusetts attorney general imposed strict rules last year on daily fantasy sports. People under age 21 are not allowed to play, college sports cannot be included, and players must be limited in how much they can bet.

A deeper concern is that states which allow or even promote gambling are also reinforcing a belief in luck as a path to prosperity instead of education and hard work. The Massachusetts panel gets it right. Any amount of “chance” in a commercial game deserves government scrutiny. Humanity has made too much progress in understanding the underlying causation of events to keep embracing “luck” as a driving force.

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By Dustin Gouker
Legal Sports Report
August 2, 2017

Maine became the fifth state to legalize paid-entry fantasy sports this year — and the 15th overall — with a new law that went on the books on Wednesday.

It’s the latest in a run of victories in small Northeastern states for daily fantasy sports sites DraftKings and FanDuel. Vermont, New Hampshire and Delaware have all enacted laws since the start of June.

Marc La Vorgna, spokesperson for DraftKings and FanDuel, offered this statement after Maine’s law took effect:

“Maine is now the 15th state to adopt a regulatory framework to protect the right to play fantasy sports, protect consumers and help a booming piece of the tech economy continue to grow. Thanks to action by the legislature — led by Senators Carpenter, Jackson, Katz, and Mason, and Representatives Dillingham, Farrin, Golden and Luchini — up to 200,000 Mainers will continue to enjoy our new national pastime — fantasy sports — under a framework of sensible, light-touch consumer protections.”

The Maine fantasy sports law, at a glance

The state legislature approved a bill clarifying the legality of fantasy sports and regulating paid contests in July.

Gov. Paul LePage had until last night to sign or veto the bill, or do nothing and allow it to become law via his inaction. The latter is what happened, officially turning the bill into law.

No matter how it happened, it’s still another law that’s good for DFS operators. Here’s what’s in it:

Declares fantasy sports a game of skill and exempt from state gaming laws.

Oversight of operators is given to the Gambling Control Unit within the Department of Public Safety. The director of that body is given wide-ranging powers, including the ability to promulgate rules.

The licensing fee for operators with revenue in state of more than $100,000 is $2,500. That would only apply to DraftKings and FanDuel. Companies with revenue less than that are not subject to a licensure fee. Smaller operators may be subject to an application fee that is to be determined.

The same $100,000 threshold applies for a tax of 10 percent on gross revenue in the state. Only DraftKings and FanDuel would have to pay this, as the industry is currently situated.

A number of consumer protections are in the law that have also appeared in other states. The laws says that operators must prevent play by employees, establish responsible gaming protocols, and segregate player funds from operational funds, among other provisions. On the final point, an audit on the disposition of funds is only required for sites with gross revenue of more than $100,000 in the state.

The law sets a minimum age of 18 for players.

The law prohibits contests based on collegiate or other amateur events.

The tally of states with DFS laws

Here’s the full list of states with fantasy sports laws (bold passed in 2017):

New Hampshire
New York

All of those except for Kansas include some sort of regulatory component.

A bill in New Jersey has reached the desk of Gov. Chris Christie, who has not signed or vetoed it, yet.

Trouble elsewhere in New England…

The news wasn’t as good in Massachusetts, the first state that acted to regulated DFS, this week.

A report from the Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports recommended that the legislature designate DFS as “online gaming.”

Moving in that direction would fundamentally alter how the state treats DFS operators. And it could have an impact in other states considering fantasy sports regulation. All the states above have specifically given DFS legal clarity as a game of skill and have not stirred up the hornets’ nest of being calling “gambling.”

DraftKings voiced its displeasure with the special commission’s report.

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Bloomberg BNA
By Paul Stinson
August 2, 2017

Arkansas has added its name to the roster of states collecting tax on fantasy sports platforms including DraftKings and FanDuel.

The new law ( Act 1075) legalizes paid fantasy sports games offered online and imposes an 8 percent privilege tax. It became effective July 30, following Gov. Asa Hutchinson’s (R) April 7 approval of the measure.

Operators of paid fantasy sports games “shall pay a tax for the privilege of conducting” those games “in an amount of eight percent (8%) of the game operator’s gross paid fantasy sports game revenues from the previous state fiscal year,” according to the law. Reporting and remittance of the tax to the Arkansas Department of Finance and Administration is required on a quarterly basis.

State legislatures have revved up efforts to legalize and tax fantasy sports this year as lawmakers look to bolster their state coffers. Arkansas is currently looking for ways to counterbalance income tax cuts that the governor has approved.

However, the revenue gain from the fantasy sports privilege tax is unknown, according to a March 16 Legislative Impact Statement on the original legislation ( H.B. 2250).

Follows Other States

Several states are choosing to legalize fantasy sports games while refraining from levying a tax. New Hampshire went that route with H.B. 580. The final measure, signed into law July 18 by Gov. Chris Sununu (R), excluded taxes and fees incorporated in earlier versions of the bill.

Next door, Vermont passed a law legalizing fantasy sports ( S. 136). Unlike New Hampshire, Vermont requires that all fantasy sports companies pay an annual $5,000 fee when they register with the Vermont Secretary of State. There is no provision to levy a tax in the Vermont law, but it orders the Legislature to convene a committee to study possible taxation and submit its recommendation by the end of the year.

According to the Fantasy Sports Trade Association, states that have legalized and tax daily fantasy sports are New York (15 percent of net annual revenue), Mississippi and Arkansas (8 percent), and Tennessee (6 percent). Other states that have legalized the industry but don’t impose a tax include Colorado, Indiana, Kansas, Maryland, Missouri, Rhode Island, and Virginia.

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By: David L. Harris
Boston Business Journal

Boston-based DraftKings Inc. railed against a state commission’s decision that recommends classifying daily fantasy sports under the broad umbrella of “online gaming,” a gambling classification that the startup has fought to avoid in every state where it operates.

The state’s Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports voted to officially adopt the recommendations at a meeting Monday afternoon after a delay last week. The recommendation still needs legislative approval.

Boston-based DraftKings Inc. railed against a state commission’s decision that recommends classifying daily fantasy sports under the broad umbrella of “online gaming,” a gambling classification that the startup has fought to avoid in every state where it operates.

The state’s Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports voted to officially adopt the recommendations at a meeting Monday afternoon after a delay last week. The recommendation still needs legislative approval.

The special committee was created as part of the legislation passed in 2016 that explicitly legalized daily fantasy sports in Massachusetts. The commission is required to review the regulations of various online gaming activities.

DraftKings also recently ran into resistance from U.S. regulators when theFederal Trade Commission voted last month to block the company’s proposed merger with DraftKings. The companies have since abandoned merger plans.

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BOSTON (AP) A federal judge has temporarily halted the planned merger between daily fantasy sports companies FanDuel and DraftKings.

Judge Ketanji Brown Jackson of the U.S. District Court for the District of Columbia approved a temporary restraining order that was agreed upon Tuesday by the two companies and the Federal Trade Commission.

Without the order, the merger could have been completed Tuesday, court records show.

The FTC, along with the attorneys general of California and the District of Columbia, oppose the merger because they say it creates a company controlling more than 90 percent of the U.S. market for paid daily fantasy sports contests.

A spokesman for the companies didn’t immediately comment.

Daily fantasy sports contests are online games in which players build rosters of real-life athletes and compete for cash and other prizes.

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