New Jersey Gov. Chris Christie vetoed a bill Thursday that would have made his state the first in the nation to legalize Internet gambling.
At a news conference before the decision was announced, Christie said he was wrestling with "legal and constitutional concerns."
Joseph Brennan Jr., chairman of a group called iMEGA, the Interactive Media Entertainment & Gaming Association, which represents offshore Internet betting websites, said Christie raised valid concerns that were not addressed in the legislation.
"My understanding is the governor is concerned about hotels or bars setting up Internet cafes," he said. "He also has concerns about youth participation in gambling and making sure only state residents are able to participate. He's concerned that some places may put together eight computers and set up a de facto back-room gambling hall that wouldn't be monitored or regulated."
Brennan said the online gambling industry wants and welcomes strict regulation, and said a new version of the bill could be introduced as early as next week.
Christie's office said a veto message would be released Thursday afternoon setting out the governor's reasons for rejecting the bill.
Deputy Assembly Speaker John Burzichelli, a south Jersey Democrat, said he would work to perfect legislation for online gambling.
"I understand this is a complicated issue that raises many legal questions," he said. "Still, the reality is that Internet gaming is coming and we need to figure out a way to make it work to benefit Atlantic City casinos."
The Legislature had passed a bill authorizing Atlantic City's 11 casinos to set up computer servers and equipment capable of receiving and paying out bets from New Jersey residents. A section that would have let people outside the U.S. play was scrapped.
If Christie had signed the bill, it could have touched off an online gold rush, with cash-strapped states rushing to approve their own Internet betting bills. New Jersey would have taxed Internet betting revenue at 23 percent, nearly three times the rate the casinos pay on their winnings.
And despite the veto, many other states are considering passing similar laws.