The U.S. Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) have launched an investigation to determine if the business model of daily fantasy-sports operators is a form of gambling that violates federal law.

The probe, which is in the preliminary stage, is part of an ongoing probe into the legality of daily fantasy sites like DraftKings and FanDuel, Inc. The games allow customers to pay entry fees to draft virtual sports teams that then compete against each other for prize money based on the real-world performances of athletes. However, the 2006 Unlawful Internet Gambling Enforcement Act prohibits financial companies from transferring money to online gambling sites, with the exception of games of skill, reports ESPN. Fantasy-sports sites argue that their operation falls under that exemption. However, the Justice Department is investigating whether or not daily fantasy games are a form of gambling that is protected by the exemption.

Unnamed sources told the Wall Street Journal that FBI agents are in the process of contacting customers of DraftKings Inc. to question them about their experiences with the Boston-based company.

In response to the allegations, Daily fantasy operators have denied any wrongdoing and argue that it is a game of skill that is protected under law.

"It is entirely predictable that the government would follow up on the misleading reports about our industry," a DraftKings spokesperson said in a statement. "We have no knowledge of the specifics of any federal investigation but strongly disagree with any notion that our company has engaged in any illegal activities."

Fantasy-sports sites came under fire last week when a DraftKings employee accidentally published data revealing which players were included on the most rosters for an NFL DFS contest. During that same weekend, the employee won second place in a contest on FanDuel and earned $350,000.

DraftKings has stated the employee had access to the data prior to submitting his lineup. The company, along with FanDuel, has since put a stop on employee participation in public fantasy contests for money.