• by Wendy Davis  @wendyndavis, August 4, 2016

A new law in New York paves the way for daily fantasy sports companies Draft Kings and Fan Duel to resume operations in the state.

The law, signed this week by Gov. Andrew Cuomo, characterizes "interactive fantasy sports" as games of skill, not chance. That distinction is important because New York prohibits betting on games of "chance," including sporting events (except for horse racing), but allows gambling on games of skill.

Games offered by companies like Draft Kings and Fan Duel involve "contests in which the fantasy or simulation sports teams are selected based upon the skill and knowledge of the participants," the measure states.

The bill requires companies offering daily fantasy sports games to register with the state, and to pay taxes equal to 15% of the gross revenue generated in New York.

DraftKings and FanDuel recently suspended operations in the state. The companies' moves came after New York Attorney General Eric Schneiderman sued them for allegedly violating state laws against sports betting and unfair advertising. He accused both companies -- which spent around $100 million on ads last year alone -- of duping consumers by promising "easy riches for a lucky few sports fans."

Late last year, Manhattan Supreme Court Judge Manuel Mendez ordered both companies to immediately shut down in New York. Mendez said in the ruling that New York's law against gambling is broad enough to cover daily fantasy sports.

An appellate court judge stayed that order the same day it was issued. But in March, the companies said they would suspend operations in New York until at least June 30 -- this year's deadline for state lawmakers to pass new legislation.

Schneiderman said this week that he will "enforce and defend the new law," but will also continue to prosecute the "false advertising and consumer fraud claims for past misconduct by Draft Kings and Fan Duel."