Gov. Chris Christie touted Revel Casino Hotel as a spur for economic growth in troubled Atlantic City. (AP/Mel Evans)

The winning streak has run cold for Atlantic City, N.J.

Earlier this week, the upscale Revel Casino Hotel announced it will close, bringing the total number of casinos in the city expected to close by the end of the year to four. Thousands of workers are confronting unemployment.

The state has long guaranteed Atlantic City a monopoly on gambling within New Jersey's borders, but gambling revenues there have been declining due to increased competition from new casinos in neighboring states and the lingering effects of the financial crisis. The monthly report from the state Division of Gaming Enforcement issued Wednesday shows that the trend is continuing, as July's take declined 7.7 percent year over year.

Pennsylvania, which only legalized casino gambling in the past decade, has replaced New Jersey as the state with the second-largest gambling industry. More casinos have been proposed in New York. Yet revenues have been disappointing across the region. In New Jersey, they have declined by around half from a high of $5.2 billion in 2006.

Most disappointing for investors has been the performance of the casinos' new online gaming businesses. The prospect of online revenues has kept several casinos open despite declining income.

"A lot of these casinos have been unprofitable for quite some time," said Alex Bumazhny, an analyst at Fitch Ratings.

Online gamblers haven't anted up, though, and several casinos have folded. Bumazhny estimates that online gaming revenues for New Jersey businesses will total only around $125 million this year. Revel follows The Atlantic Club, which closed in January, and the Showboat and the Trump Plaza Hotel and Casino, also expected to close this year.

Bumazhny said that Revel was poorly designed and conceived. The gambling floors were too far from the hotel and the boardwalk. The luxury casino, built for high rollers, lacked the kind of amenities that the typical gambler is accustomed to, notably a buffet. The loyalty programs offered by other casinos in Atlantic City discouraged customers from abandoning their old haunts for something new.

New Jersey Gov. Chris Christie had issued a $261 million subsidy to the casino three years ago. In return, the state would receive a fifth of the profits. As Josh Barro explained at the time, the subsidy amounted to a kind of equity investment in the casino, funded through a tax credit.

If Revel's failure comes at taxpayers' expense, though, the Republican governor doesn't deserve all the blame. Democrats in the state legislature have also been staunch supporters of gaming in Atlantic City.

"There are a heck of a lot of jobs that have been created by the casino industry over the past 35 years. That’s become an important constituency to them," said Patrick Murray, the director of the Monmouth University Polling Institute.

The closures could put a quarter of Atlantic City's 32,000 casino employees out of work, Joseph Seneca of Rutgers University told The Wall Street Journal. The unemployment rate in the city is already above 13 percent.

Meanwhile, elected officials are trying to come up with a coherent plan for a more sustainable economy.

"The mistake in Atlantic City is we put all of our eggs in one basket," state Senate President Stephen Sweeney said, adding that diversification was beginning decades late and will require a major investment.

Sweeney's proposal would end Atlantic City's monopoly on gambling in New Jersey, allowing new casinos to be built in the northern part of the state as long as they agreed to dedicate a portion of their revenues to rebuilding Atlantic City. Sweeney hopes the city can become a resort that attracts beachgoers, shoppers and tourists of all kinds, not just gamblers.

"Atlantic City was a resort for a long period of time" in a previous era, he said. "It’s an international brand."

Sweeney is confident that new casinos to the north would draw Jersey residents for whom the closest casinos would otherwise be across the state line in Pennsylvania or New York. The economy has also begun to improve nationally, and people will soon have a little more spare change in their pockets to feed the slot machines with. All the same, it is unclear whether a new casino in North Jersey would do much better than Revel, given the increasingly intense competition for gamblers' money.