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In news first reported by ESPN's Darren Rovell, the five-judge panel opted to allow for daily fantasy companies to continue operating in the state until the larger court appeal on the industry's legality is decided.

The temporary stay of an injunction granted by a New York state trial court on December 11 was extended on Friday by a panel of New York State Appeals Court judges. Well, specifically, that they were barred from "accepting entry fees, wagers or bets from NY consumers in regards to any competition, game or contest".

"As our litigation continues, we expect an appellate court to see what we have known since the outset: DFS is a game of knowledge and skill, one that builds community and whose competitive spirit has become important to the lives of millions of people", said David Boies, a lawyer for Boston-based DraftKings.

This should open up quite the interesting ordeal with the appelate division leading up to the appeal hearing in Supreme Court in May.

Schneiderman's office did not immediately return messages seeking comment on the court ruling Monday afternoon.

A lower court judge agreed and ordered them to stop.

"They'll have an opportunity to take this issue up in earnest", he said.

Those who participate in daily fantasy sports pay funds for a short term game in which they hire a roster of players and can defeat other players based on the performance of those players they hired.

Editor's Note: CBS has an investment in FanDuel of less than 1 percent of that company's value.

The New York attorney general says the business constitutes illegal gambling under state law because the outcome of the contests depends mostly on chance and factors outside of a player's control.

Massachusetts Attorney General Maura Healey has said daily fantasy sports contests are not clearly addressed in state gambling law. Both companies were already under scrutiny as to whether or not the games were actually gambling since the start of an ad-filled National Football League season.

DraftKings and FanDuel pulled out of Nevada past year after that state's gambling regulators insisted the companies get a gambling license.

Now, all parties must wait until the appeal is heard before the New York Supreme Court later this year.

Boies said the fight in New York State isn't over yet, as there has been no final ruling.

For more news, visit Bloomberg Business.