The US Supreme Court has left in place a lower court ban on sports betting in New Jersey.
The court declined to review the original decision by a federal appeal court, ending a two-year legal battle.
In 2011, New Jersey voters passed a referendum to allow sports betting, which was subsequently legislated into New Jersey law.
Governor Chris Christie championed the bill, saying it would help limit illegal sports betting and capture some of the revenue for the state.
However the legislation ran up against the 1992 Professional and Amateur Sports Act (PASPA), which limited sports betting to four states, with only Nevada offering unrestricted wagering.
The governing bodies of the four main US sports and the National Collegiate Athletic Association (NCAA) sued to block the New Jersey law from taking effect, saying it would irreparably harm their products.
In retaliation Gov. Christie said the existing law intruded on state sovereignty and discriminated among the states.
In response to the Supreme Court's decision, New Jersey Senator Raymond Lesniak said he plans to introduce a bill which will repeal all laws prohibiting sports betting, and hopes it will go unchallenged by the judiciary.
"Aren't they selling marijuana in Colorado and Washington?" he said. "Isn't that against federal law?"
Legalised sports betting is particularly attractive to New Jersey given the initially disappointing profits from online poker and its diminishing share of land-based casino revenues.