TRENTON - When it comes to sports betting, the federal government has stacked the odds against New Jersey.

The state passed up its chance to lure the popular wagering to Atlantic City more than 10 years ago, shortly before Congress banned the practice in all but four states.

But two South Jersey lawmakers say they are ready to challenge the federal law, on the gamble that the betting could raise millions in taxes for the state.

Assembly Budget Committee Chairman Louis Greenwald (D., Camden) said he believes the ban is unconstitutional because it infringes on states' rights. Most wagering decisions - such as New Jersey's 1976 move to bring casinos to Atlantic City - are the responsibility of state government, he said.

"I believe the federal government has overstepped its bounds and that we should look into moving forward with this, challenging the federal government to stop us," Greenwald said. "We've had gambling since 1976, and it hasn't brought down the morals of the state. Instead it's helped us, serving as an economic engine."

Sports-betting revenue could help fund the state's $320 million program for charity care at hospitals, Greenwald said. Casino money already pays for the state's prescription-drug plan for seniors, so the two would make a good match, he said.

Assemblyman Jeff Van Drew (D., Cape May) is focused on how sports betting could boost tourism.

"We need to ensure Atlantic City is on the cutting edge, and right now it's at a competitive disadvantage with Vegas and their sports betting," he said. "The competition for Atlantic City is everywhere around us, whether it's from [proposed] slot machines in Pennsylvania or New York or online. We need to keep South Jersey's economic generator thriving."

Van Drew has called for a legislative hearing on sports betting next month, after lawmakers return from their budget recess. In the meantime, he has asked the state Casino Control Commission to examine the legal hurdles.

Gov. McGreevey is "intrigued" and looks forward to discussing the idea more, spokesman Micah Rasmussen said. The governor, who has had to close multimillion-dollar gaps in two budgets during the state's fiscal crisis, "appreciates any ideas about new revenues to help balance the budget," Rasmussen said.

U.S. Rep. Frank LoBiondo (R., N.J.) "strongly supports sports wagering" in Atlantic City and has volunteered to lobby in Washington. The New Jersey Hospital Association and the state's 12 casinos also have pledged support.

But State Sen. Bill Gormley (R., Atlantic), the sponsor of a 1993 bill that would have brought sports betting to Atlantic City, warned supporters that they had a long battle ahead.

Gormley's bill would have made New Jersey the fifth state - after Nevada, Oregon, Delaware and Montana - to grandfather sports betting before the federal ban took effect. (Only Nevada and Oregon have put such betting into operation.) His legislation passed the Senate but failed in the Assembly amid opposition from professional sports teams, the NCAA, and then-U.S. Sen. Bill Bradley (D., N.J.), author of the federal ban.

"To do this, you'd have to change the federal law and maybe even the state constitution, and all those same opponents will reappear to work against it," Gormley said. "Of course, I support the idea - no one worked harder than I did when it was the time to get it through. I just don't want to offer any false hope."

Nevada gaming interests would likely lobby against Atlantic City's gaining another casino attraction, said Koleman Strumpf, an economics professor at the University of North Carolina who has studied sports betting.

"New Jersey would face a full-court press from the folks out in Nevada, and of course college sports associations have been very outspoken in their opposition, so this would be a tough thing to pull off politically," he said.

In Las Vegas, about $2 billion is bet each year on sports, and it is more of "a draw to the casinos than the big moneymaker," Strumpf said. Of that amount, the casinos keep about $100 million, or 5 percent.

But much more sports betting takes place illegally. Officials estimate that gamblers wager between $100 billion and $400 billion on sports in the United States each year. Much of that takes place on the Internet, Strumpf said, or with bookies in illegal betting parlors.

"New York is known as the center of the illegal sports market in the United States, and so if New Jersey could get a big hold of the illegal market, there's a lot of money there," Strumpf said.