“New York is a critical state for FanDuel,” the company said. “We are proud to be one of New York’s largest start-up companies, and while it is disheartening for us to restrict access to paid contests in our home state, we believe this is in the best interest of our company, the fantasy industry and our players while we continue to pursue legal clarity in New York.”

DraftKings said it would continue to work with state lawmakers “to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love.”

Last week, the State Senate, which is led by a thin majority of Republicans, passed a resolution that endorsed legalizing and regulating the industry. The Democrat-dominated State Assembly has taken no formal position, though the chairman of its committee on racing and wagering, J. Gary Pretlow, a Westchester County Democrat who has supported legalizing online poker in New York, said late last year that he expected the Legislature to act to legalize fantasy sports.

Gov. Andrew M. Cuomo, a Democrat, supported an expansion of casino gambling in the state in 2013, but he has largely stayed on the sideline in the fantasy sports debate, deferring to the outcome of Mr. Schneiderman’s litigation.

Mr. Schneiderman and other state attorneys general in some of daily fantasy’s largest markets, like Texas and Illinois, have determined in recent months that the games are forms of gambling and not legal in their states. That has prompted payment processors like Vantiv to withdraw from the market and major banks like Citigroup to block payments in New York through their cards until the legal status of daily fantasy sports is decided.

When DraftKings and FanDuel blitzed broadcasts with hundreds of millions of dollars in commercials last fall at the beginning of the N.F.L. season, promoting contests in which players assemble their own teams of professional athletes and engage in competition based on the players’ statistical performances in real games, daily fantasy sports looked to be a virtual cash machine. Each company was valued at more than $1 billion, and its investors included Major League Baseball, the N.B.A., and the N.F.L. owners Jerry Jones and Robert K. Kraft, as well as major media companies like NBC.