Patrons line up to place bets at Freehold Raceway in Freehold, N.J.Wayne Parry/The Associated Press
The federal ban on sports betting in all but four states was upheld Tuesday, dealing a blow to New Jersey's latest effort to expand gambling options to help its struggling casinos and racetracks.
But the 2-1 ruling by a panel of the 3rd U.S. Circuit Court of Appeals in Philadelphia left the door open for New Jersey to further appeal the matter to the full court.
"We are reviewing the opinion, and the dissent, and considering our legal options," said Leland Moore, a spokesman for the state Attorney General's Office.
The state has been trying since 2009 to legalize sports betting at its casinos and racetracks. Four of Atlantic City's 12 casinos closed in 2014.
At issue in the appeal was whether a 2014 New Jersey law repealing prohibitions against sports gambling violates a 1992 federal ban in all states except Nevada, Oregon, Montana and Delaware.
Before the ban was enacted, New Jersey was given the chance to become the fifth state but failed to act during a prescribed window.
State Sen. Ray Lesniak said the judges got it wrong and predicted the case would be appealed shortly.
"We repealed a law for sports betting at casinos and racetracks, and that does not violate" the federal ban, said Lesniak, a Democrat. "We are allowed to do that."
Judges Maryanne Trump Barry, the sister of Republican presidential candidate Donald Trump, and Marjorie Rendell ruled that the state can't use "clever drafting" to get around the federal ban, citing language in the 2014 law that it "shall not be construed as causing the state to sponsor, operate, advertise, promote, license, or authorize" sports betting.
Judge Julio Fuentes dissented to the panel's decision.
Republican Gov. Chris Christie's administration issued a directive in September 2014 that the state wouldn't enforce a ban on sports betting. None of the casinos or racetracks began taking bets, however, as the court fight continued, and a federal judge ruled against Christie two months later.
Geoff Freeman, president of the American Gaming Association, the casino industry's national trade organization, said Tuesday's court ruling cries out for closer scrutiny of the issue.
"With Americans betting at least $140-billion on sports illegally each year, it's clear that current law is not achieving its intended result," he said in an email.
Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League and the NCAA all support the ban, saying it upholds the integrity of the games in the public's mind.
NBA Commissioner Adam Silver and MLB Commissioner Rob Manfred have separately expressed some level of support for taking a new look at sports betting outside Nevada, the only state to allow wagers on individual games at betting parlours.
NFL spokesman Greg Aiello declined to comment. "The decision speaks for itself," he said.
New Jersey's earlier efforts to overturn the ban in court were rebuffed when the U.S. Supreme Court declined last year to hear its challenge to the federal law. The state also began allowing Internet gambling in 2013.
Daniel Wallach, a sports and gambling attorney with the Fort Lauderdale, Florida-based law firm of Becker & Poliakoff, has been monitoring New Jersey's bid to expand its gambling options. He said the ruling was "a major setback," but he believes the state has a good chance of obtaining a hearing before the full court.
But even if the state is successful, he said, it would likely be five to seven years before legal sports betting started in New Jersey.
"There will be no legal sports betting in New Jersey in 2015, that's for sure," Wallach said.