An appellate court judge granted a temporary stay to daily sports fantasy sites DraftKings and FanDuel hours after a New York judge on Friday granted a temporary injunction [order, PDF] demanding the fantasy sports companies cease operations in that state. The temporary stay was granted [NYT report] by Appellate Division of the State Supreme Court Associate Justice Paul Feinmanin in response to arguments by DraftKings that the company would be irreparably harmed if forced to shut down. New York Attorney General Eric Schneiderman filed suit against the companies last month for allegedly violating New York law that prohibits gambling operations. In response, DraftKings and FanDuel’s legal teams asserted that the companies admitted entry fees, not wagers, and could therefore not be held to be gambling operations. Justice Manuel Mendez, who granted Schneiderman the injunction against the sites, maintained [ESPN report] that “New York State penal law does not refer to ‘wagering’ or ‘betting,’ rather it states that a person ‘risks something of value.'” The companies’ temporary stay will allow them to do business in the state until [WSJ report] January 4.

Gambling is heavily regulated federally and on the state level. In August 2012 a judge for the US District Court for the Eastern District of New York ruled [JURIST report] that a poker game operator could not be tried under a federal gambling law because poker is more a game of skill than a game of chance. In December 2011 the US Department of Justice (DOJ) clarified its stance on online gambling [JURIST report] in a memorandum opinion holding online non-sports related gambling that crosses state or international borders is not covered by the Wire Act of 1961. In November of that year, New Jersey passed Public Question 1 [JURIST report] by a 65 percent margin, amending the New Jersey constitution [text] to legalize sports gambling, but earlier this month professional and college sports leagues filed a lawsuit against the state [JURIST reports] seeking to enjoin the law as a violation of the Professional and Amateur Sports Protection Act (PASPA).