The ruling that DFS competitions are not games of skill was passed by Acting Supreme Court Justice Gerald W. Connolly in the case brought forward by lawyer Cornelius Murray.
Murray wants New York to shut down DFS contests in the state.
DFS operators DraftKings and FanDuel went through the New York courts in 2015 when Eric Schneiderman, the Attorney General at the time, issued cease and desist orders to both.
They were denied injunctive relief by the Supreme Court; it sided with Schneiderman in assessing DFS as gambling under existing law.
Months later, however, lawmakers changed legislation and legalised fantasy sports as a game of skill.
After this development, an anti-gambling coalition hired Murray to fight the new law on the terms this constitutional alteration required a voter referendum.
Schneiderman acted as general counsel in the current case against DFS in New York and requested the court for dismissal.
He maintained his belief the state exercised its proper authority in regulating fantasy sports, but the dismissal was denied.
It is as yet unclear what the next steps will be, but DraftKings and FanDuel could perhaps appeal the ruling and have not been ordered to cease trading in the state.
Attention now shifts to the current Attorney General of the state, Barbara Underwood, who may need to make a final decision as Schneiderman did in 2015.
