In a decision released late Thursday, a federal judge upheld a 1992 law prohibiting sports wagering in 46 of 50 U.S. states, including New Jersey.
In December, the same judge declined to throw out a lawsuit by the four major pro sports leagues and the NCAA seeking to stop New Jersey from implementing its sports betting plans.
The state is expected to appeal Thursday's ruling.
Last year Gov. Chris Christie signed a law that would allow sports betting at Atlantic City casinos and horse racing tracks.
The NFL, NHL, NBA, Major League Baseball and the NCAA sued, and the NCAA moved several championship events out of New Jersey because of the sports betting law.