WASHINGTON — The winning streak has run cold for Atlantic City.
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 about 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. Loyalty programs offered by other Atlantic City casinos discouraged customers from abandoning their old haunts for something new.
New Jersey’s governor, 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 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.