Yes! While most forms of online betting have been stuck in a gray area since the passage of the UIGEA in 2006, daily fantasy betting was granted a specific exemption as a game of skill.

The specific language in the law that allows daily fantasy league betting: (Source: Cornell Law)

(ix) participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation team is based on the current membership of an actual team that is a member of an amateur or professional sports organization and meets the following conditions:

(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by participants.
(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
(III) No winning outcome is based:

(aa) On the score, point spread, or any performance or performances of any single real world team or any combination of such teams;
(bb) Solely on any single performance of an individual athlete in any single real-world sporting or other event.

There are a few states that have individual laws which make the situation less clear, and as such, most fantasy league sites will not offer paid games to residents of those states. The states are Arizona, Iowa, Louisiana, Montana, and Vermont.

Daily draft games like those reviewed on DraftWhiz.com are relatively new, only having been around for a couple of years, but already tens of millions in prizes are being paid out yearly.