DFS, in particular, was and is very legitimately a game of skill. (In fact, looking at it from an Elo perspective and from the perspective of "Who should win?", it's more of a game of skill than the sports themselves!) There was absolutely no reason for it to be made illegal, other than to protect the tribal gaming interests in California and Florida. They pushed back so hard and with such little justification that the tide really, really turned against them in a much more broad way than they ever anticipated.
The ironic thing is, Matt King at FD and Jason Robins at DK probably would have been perfectly happy if the outcome had been that they be allowed to merge and that DFS is legalized and regulated. Instead Robins is a billionaire and Flutter made the best corporate acquisition of the 2010s.