SAN FRANCISCO — Yahoo is stepping into the rapidly growing world of daily fantasy sports.

The company just introduced Yahoo Sports Daily Fantasy, a new fantasy sports platform that will allow people to compete in daily competitions for cash payouts.

Like traditional fantasy sports leagues, daily fantasy services allow users to compete against one another for cash. But unlike say, a fantasy football league, which won't pay out until the end of a season, daily fantasy services have hundreds or thousands of contests and payouts each day.

Players pony up cash up front to enter daily competitions and that money is entered into a larger pool that is paid out at the end of the day based on who chose the best players. Particularly savvy users can earn thousands of dollars a day, though Yahoo VP Kenneth Fuchs said the average daily fantasy player spends about $257 a year.

Yahoo's Daily Fantasy platform, available now on the web and iOS, will begin with Major League Baseball and will expand next to the NFL with more sports to follow, Fuchs said. The service will be available in 45 states as Arizona, Washington, Montana, Louisiana have laws prohibiting fantasy sports competitions that use real money.

Image: Yahoo

Yahoo formally stepping into the daily fantasy space will go a long way toward legitimizing a niche that, until recently, has been viewed as a fringe area of fantasy sports more akin to legal sports betting than conventional fantasy leagues. Mainstream fantasy sports platforms have largely avoided the daily fantasy category until now due to possible legal concerns. Daily fantasy sites have largely avoided legal troubles through what has been described as a "loophole," in Internet gaming laws.

"Fantasy Sports is a game of skill," Fruchs said during a press event in San Francisco Wednesday. "We stay very close to the laws and we know that in 45 states this is legal and it's fairly well established fantasy sports is a game of skill."

The move also puts Yahoo in direct competition with the rapidly growing FanDuel and Disney-backed DraftKings — two of the largest daily fantasy platforms. FanDuel,currently the biggest player in the space, says it pays out more than $10 million each week.

Yahoo, which already has "tens of millions" of users competing in fantasy sports competitions, according to Fuchs, will take a cut of "about 10%" from users' entry fees.