The 1992 federal law largely bans sports betting in the states. The appeals court panel decision affirms a ruling by a U.S. district court judge in March.
New Jersey can ask the full 3rd U.S. Circuit Court of Appeals, headquartered in Philadelphia, to rehear the case or ask the U.S. Supreme Court for review. The case was expected to head for the top court in any event, NewJersey.com reported.
The report listed much of the appeals court opinion Tuesday.
The appeals panel said New Jersey wanted its own sports betting law to address illegal sports wagering within its borders and to improve its economy. But a conglomerate of sports leagues -- including the NFL and the NBA -- as well as the U.S. government challenged the state law.
New Jersey argued the sports leagues lacked standing to bring the challenge because they were not injured by the law, and that the federal Professional and Amateur Sports Protection Act went beyond Congress' authority and violated state sovereignty.
The federal law allows Nevada to license widespread sports gambling while banning other states from doing so.
The appeals court panel said it concluded the sports leagues have constitutional standing "to enforce PASPA and that PASPA is constitutional," and Congress had authority under the Constitution's supremacy clause, which gives federal law the authority to trump state law.
The panel said it wasn't saying whether the PASPA was desirable.
"We speak only to the legality of these measures as a matter of constitutional law," the panel said, although the "case is made difficult by strong arguments" in favor of the New Jersey law, The panel majority said it was its duty only to "say what the law is. ... New Jersey's sports wagering law conflicts with PASPA and, under our Constitution, must yield."
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