New Jersey plans to appeal a court ruling on Tuesday that the state's 2012 law violates the federal statue prohibiting licensed sports betting in most states.
It's the latest blow to New Jersey's attempt to legalize sports gambling after a three-judge panel of the U.S. Court of Appeals for the Third Circuit in Philadelphia ruled 2-1 against the state.
State Senator Raymond Lesniak said officials would appeal either to the full appellate court or the U.S. Supreme Court.
"For the first time, a judge has ruled in our favor. That gives us hope that others ... will allow New Jersey to enjoy the economic benefits of sports betting that are now reserved exclusively for Nevada," he said in a statement.
The dissenting judge, Thomas Vanaskie, said that the federal law, the Professional and Amateur Sports Protection Act, itself violates federalist principals.
Governor Chris Christie had signed a law last year that authorized sports betting at the state's racetracks and at Atlantic City casinos.
But sports leagues sued, and a federal judge struck down the law in March. The state appealed but on Tuesday the panel ruled saying the law violates the federal statue.
New Jersey officials hoped that legalized sports wagering would generate more revenue for Atlantic City's gambling industry, which has lost customers to a spate of new casinos opening in nearby states.
Congress passed a law in 1992 that blocked states from allowing legalized sports wagering. Four states that had already legalized sports betting at the time were grandfathered into the 1992 law and allowed to continue. New Jersey had one year to opt in, but never did.
(Reporting by Hilary Russ; Editing by Bernard Orr)