NEW YORK – A U.S. appeals court upheld a federal ban on Internet gambling, but the ruling appeared to open the door for states to have more say on the matter.

In a decision handed down Tuesday, the U.S. Court of Appeals for the Third Circuit rejected a claim by New Jersey-incorporated Interactive Media Entertainment & Gaming Association that current laws aimed at cracking down on online gambling are too vague, unconstitutional and infringe on an individual's right to privacy. The decision comes amid a struggle between...