A U.S. appeals court on Tuesday ruled against a New Jersey law authorizing sports gambling in the state, upholding a lower court ruling that voided the state's repeal of some prohibitions against sports gambling.
Attorneys and advisors had predicted that had New Jersey won, it would have enabled the state to grab a slice of a national market that could be as much as $400 billion and would have had implications beyond the state.
The decision by the U.S. Court of Appeals for the Third Circuit was by a 2-1 vote.
The National Collegiate Athletic Association, National Football League, National Basketball Association and other leagues sued after New Jersey lawmakers legalized sports betting in 2012. The leagues said that violated a 1992 federal law that banned the activity in all but four states, particularly Nevada, where it was already allowed. Betting also threatens the integrity of sports games, the leagues argued.
New Jersey lost the case, but it tried again last year with new legislation that attempted an end-run around the federal ban which prohibits states from authorizing, sponsoring, operating or licensing the practice - by essentially removing state control and deregulating sports wagering at casinos and racetracks.
"We are pleased that the Third Circuit has adopted the position of the sports leagues and the NCAA," said Major League Baseball in a statement.
A spokesman for New Jersey Governor Chris Christie's office did not give immediate comment.