In my opinion I don't see how the daily fantasy sports is any different then gambling on horses.
The reasoning is like this: Participation in the progress of playing makes a difference. In one case you are just placing money on things other people are doing. In the other case you are placing money on your own actions. For the risk of gambling addiction this is relevant. And it has a lesser (indirect) potential for fraud.
I've worked for gambling companies in the UK and we are heavily regulated, although not as much in the areas that you would want e.g. addiction.
The US Government didn't feel the same way about poker and made that specifically illegal, despite it also being a game of skill. Actually, a lot of the seeds of daily fantasy sports came from poker. I'm pretty sure both FanDuel and DraftKings exec teams gave some roots in poker. The legislation that made poker illegal is what also kept fantasy sports legal, so it was near and dear to many avid poker players at the time.
You could also easily argue that normal sports betting against handicappers is a game of skill. There are experienced bettors who are long-term winners and it makes sense that if you can accurately find inaccurate lines with the right odds that you could be a long-term winner.
I personally don't find anything wrong with daily fantasy sports, but do have a problem that they were given a blessing by the government that other skills games weren't.
To be honest if I were to go after gambling I would care about banning skill based games more as they create more delusions, professional players and mechanism to suck young people in.
I'm not a gambler, so this doesn't really impact me, but I don't get why it's against the law.