Getty Images

[Editor’s note: FanDuel is an advertiser of PFT and PFT Live on NBC Sports Radio. Also, NBC Sports has an equity stake in FanDuel.]

In a move that eventually could cripple if not kill an entire industry, a judge in New York ruled on Friday that daily fantasy games violate New York law, and that companies like FanDuel and DraftKings must stop doing business there immediately, according to Reuters.

The ruling comes 16 days after a hearing on the effort by New York Attorney General Eric Schneiderman to shut down the industry permanently, via a preliminary injunction stopping the games pending the outcome of the underlying litigation.

Judge Manuel Mendez’s decision to shutter daily fantasy while the court case proceeds suggests that Mendez eventually will issue a permanent injunction banning the games in New York. FanDuel had voluntarily stopped doing business in New York. DraftKings had continued, and a DraftKings lawyer told Reuters that the company will file an appeal and seek an immediate stay of the ruling.

The companies had been confident that Friday’s ruling would go the other way, based on November 25 oral arguments during which renowned attorney David Boies made a compelling case for allowing DFS to proceed in New York.

While legal under federal law, each of the 50 states can make its own decision about daily fantasy. Some states hope to regulate (and undoubtedly tax) the industry. Others simply have chosen to block it entirely.

The New York case is based on existing state law, which could be changed by a legislature that decides to permit daily fantasy, under circumstances that would result in New York getting a piece of what quickly had become a billion-dollar pie.

The rapid growth of daily fantasy, punctuated by a Cola War between the two leading companies that resulted in a flood of commercials and other advertisements early in the 2015 NFL season, made it a target for intense scrutiny. Friday’s ruling becomes the biggest loss yet in what has become, somewhat ironically, a daily fight for the existence of a pair of billion-dollar companies.