A US federal court has ruled that entry fees for horseracing fantasy contests are the equivalent of real-money wagers under the Interstate Horseracing Act (IHA) of 1978.

In December 2015, racetrack operator Stronach Group filed a federal lawsuit in the US District Court for the Central District of California against Horse Racing Labs, the parent of horseracing fantasy operator DerbyWars. Stronach accused DerbyWars of violating the IHA by offering wagers without a betting license and failing to provide Stronach tracks with a cut of its revenue.

In a ruling issued Monday, Judge S. James Otero determined that DerbyWars “is operating an off-track betting system” as defined under the IHA, as the site’s fantasy tournaments involve races in states other than DerbyWars’ Kentucky home. Accordingly, Otero ruled that the IHA can serve as a predicate for Stronach’s claim for compensation under the California Business & Professions Code.

Like a host of other daily fantasy sports operators, DerbyWars had argued that its business model was permissible under the fantasy carveout in the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA).