Yahoo jumped into the increasingly competitive fantasy sports market Wednesday by formally announcing Yahoo Sports Daily Fantasy, a new service that will allow players to compete for cash prizes in daily and weekly contests.

With Daily Fantasy, Yahoo will be taking on FanDuel and DraftKings, the two sites that have popularized daily fantasy sports and currently dominate the market. The new service launches Wednesday with Major League Baseball games and will move on to the National Football League and other sports as more seasons start up. 

Yahoo Sports already has more than 98 million monthly users, many of which play season-long fantasy sports. This gives Yahoo the opportunity to introduce "tens of millions" of fantasy players to the growing world of daily fantasy sports, said Kenneth Fuchs, Yahoo's vice president of publisher products.

Players will be able to wage money with all major credit cards and PayPal, and if they win, they'll receive their cash prizes within 48 hours by way of PayPal. Yahoo, meanwhile, will make money off the service by taking a 10 percent cut of every contest entry fee. For now, Yahoo Sports Daily Fantasy will not feature any advertisements, but that could change in the future. 

With Yahoo Sports Daily Fantasy, players will be able to deposit up to $600 a day for these short-term fantasy sports competitions. The service will be available in the 45 U.S. states where daily fantasy sports are legal, excluding Iowa, Arizona, Louisiana, Washington and Montana. Daily fantasy sports differ from sports gambling because "fantasy sports is a game of skills," said Fuchs, who said he does not anticipate Yahoo running into any legal issues with the new service.