The best regulation for daily fantasy sports will come from customers, not from the government.
It recently came out that an employee of DraftKings played on FanDuel and won $350,000 possibly using insider information. Since then there have been numerous calls for Congress to get involved; even the headline of the NY Times article includes "unregulated" as a not-so-subtle way of fear-mongering.
I understand why people want government to get involved, but they're wrong; this is not a situation which requires Congressional intervention. What's the fallout in a case of insider gaming (excuse the pun) such as this? If customers no longer feel the games they compete in are operating on the level, they'll stop playing. The potential for going out of business will provide far more incentive than the threat of a fine, which almost always pales in comparison to the potential revenue at stake.
Of course, if government were to send DK and FD the way of the off-shore casinos under the '06 Unlawful Internet Gambling Enforcement Act, that's a different ball of wax and would really represent an example of where the government needs to peel back regulations, not add them.