New Jersey lawmakers and industry representatives Monday debated what has suddenly become a hot question across the country: Should daily fantasy sports be considered gambling and face the kind of regulation casino companies do?

Such was the focus of a hearing by the state Assembly's gaming and tourism committee as the burgeoning, billion-dollar industry faces increasing scrutiny amid allegations of insider trading.

The FBI and U.S. Justice Department are reportedly looking into the matter, and some critics and officials say it's time for the industry to be regulated. Last month, Nevada required daily fantasy sports companies to obtain a gambling license. Other states are considering passing similar rules.

Experts say New Jersey could help set the tone for the rest of the nation since, along with Nevada, it's one of the foremost states when it comes to gambling, with some of the nation's toughest regulations.

Last week, state Sen. Jim Whelan (D-Atlantic) said he will soon introduce a bill that would require daily fantasy sports companies like DraftKings and FanDuel — as well as casinos that offer fantasy sports — to be regulated and vetted in New Jersey the same as online gambling companies.

MORE: N.J. lawmaker wants to regulate fantasy sports

Gov. Chris Christie, a Republican presidential candidate, said last week that fantasy sports are not the same as gambling and thus should not face regulation.

At Monday's hearing, Jeremy Kudon — who represents DraftKings, FanDuel, and the Fantasy Sports Trade Association — told the committee that their companies should not be treated the same as casinos because their games rely more on skill than chance.

He noted that 50 million people in the U.S. — and 15 million in New Jersey — play fantasy sports.

"It's a form of entertainment, not gambling," Kudon told the panel. "It gives them a greater appreciation of the sports they love."

He argued that players need to have a strong understanding of statistics and strategy to win.

"It depends almost entirely on the amount of time, research and talent — otherwise known as skill," Kudon said. "Chance is not a material effect in the contest."

Daily fantasy sports companies allow players to deposit money and create mock teams in specific sports to compete against other people and win money based on the statistics of the players on their roster in either one-day or one-week competitions.

They are different from season-long fantasy sports leagues that people often form with friends or co-workers.

Kudon suggested that lawmakers should pass "common-sense" legislation to protect consumers instead. But experts say it's crucial for the industry not to be associated with gambling to avoid costly fees associated with having to obtain gambling licenses.

MORE: Christie says fantasy sports shouldn't be regulated

Assemblyman Ralph Caputo (D-Essex), the committee's chairman, countered that fantasy sports are "really a hybrid" of chance and skill.

"We've got to look at the total picture for gaming in New Jersey," Caputo said. "It's going to be regulated in one way or another. And it may not be in the way you want it."

Assemblyman Troy Singleton (D-Burlington) shared a similar view.

"It is clear that chance is a material factor into the outcome," Singleton said. "I know a ton of people who are skilled in drafting. But at the end of the day, if Tom Brady breaks his leg, it doesn't matter how skillful you were in drafting Tom Brady.

"I've lost to my wife a number of times in daily fantasy sports," he added, "and I know she doesn't have as much skill."

Lawmakers said the state Legislature may need to change the New Jersey Constitution if it deems fantasy sports is gambling because it would expand gambling beyond Atlantic City, requiring a constitutional amendment.

But it may be a while before any measure is considered. Lawmakers said they will not vote on the matter until after the U.S. Third Circuit Court of Appeals decides on New Jersey's latest bid to legalize sports betting at casinos and racetracks.

The NCAA, NFL, NBA, MLB, and NHL are suing to stop the state, saying its plan continues to violate a 1992 federal ban on sports wagering.

But the state says its latest effort circumvents the ban because casinos and tracks would offer the betting without state regulation. The court will decide whether the move is legal, and experts say the state finally has a strong shot at winning the case.

A date for a hearing has not been set, though officials say it could stretch into next year.

"I do not want to do anything that puts the sports betting ruling in jeopardy," Assemblyman Ronald Dancer (R-Ocean) said.

Dennis Drazin, an attorney and adviser for Monmouth Park in Oceanport, suggested that like the sports betting plan, independent regulators should oversee daily fantasy sports to "stay clear" of the federal sports wagering ban.

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