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The mammoth Revel Casino Hotel, with its curving facade, high-end restaurants and pulsating nightclubs, was heralded as a game-changer in Gov. Chris Christie's push to revitalize Atlantic City.

But Revel announced Tuesday it would close next month after two years of operation, possibly carrying away 3,000 jobs from the beleaguered seaside city and dealing a setback to Mr. Christie's vision for its renewal. Revel had already filed for bankruptcy twice.

Casinos in the city are falling like dominoes. The Atlantic Club closed in January, and the Trump Plaza and the Showboat say they plan to shut down later this year.

"The Revel is definitely a blow for Atlantic City, gaming in general and the state of New Jersey," said Jeff Hartmann, a former chief executive of the Revel. "The competitive headwinds were just too difficult at this point in Atlantic City. This will have an impact on how investors look at Atlantic City and the industry."

The Christie administration declined to comment.

Lawmakers who have fought to open a casino outside Atlantic City said the news of Revel's closure strengthened their case to end the resort city's monopoly on New Jersey casino gambling.

Under proposals being discussed, casinos opened in other parts of the state would share a portion of their revenues with Atlantic City. Mr. Christie has said he would consider such an idea.

"In the long term, North Jersey casinos are the only hope that Atlantic City has for a revival," said state Sen. Raymond Lesniak, a Democrat who has pushed more gambling options.

Atlantic City officials have expressed distrust of such proposals, saying they would further stymie the resort's business.

The Revel had a range of problems, from the expense of building its own power plant to a layout criticized because gamblers had to walk a long distance or ride up a steep escalator to get to the casino. It also had to compete with the Borgata, which already had cornered much of the luxury market.

The casino's problems mirrored a broader trend. Atlantic City has faced increased competition from Pennsylvania and Maryland, along with the prospect of new non-Indian tribe casinos in New York state. The city's gambling revenue is down to $2.86 billion in 2013 from $5.2 billion in 2006.

The Revel's closure also would hurt New Jersey state coffers, as casino winnings are taxed at 9.25%, with 8% going to the state.

In a statement, Revel's owners said they still hope to sell the property, "in some form, through the pending bankruptcy process," but couldn't find a credible buyer by next month.

Atlantic City Mayor Don Guardian and others said they were skeptical of the casino's position, saying they believed buyers were interested.

"We always like to think we know where the bottom is," said Keith Foley, a casino analyst for Moody's Investors Service. "We don't know where the bottom is for Atlantic City."

The city's unemployment rate—13.1% in June— is likely to further climb, said Joseph Seneca, an economist at Rutgers University. By the fall, the city could face the loss of 8,000 of the 32,000 casino jobs it had last winter.

Moody's, the credit-ratings firm, said the closure would hurt the city's finances because Revel contributes about $20 million in property tax revenue. The firm downgraded the city's bond rating to junk status last week and says further action could come.

The mayor is asking the state for additional aid and trying to cut spending. Mr. Guardian declined to comment beyond a statement issued by the city.

Liditze Diaz, a 20-year-old waitress at Revel, said she was considering leaving the city. Her stepmother was laid off as a housekeeper at the Atlantic Club when it closed in January, and she supports her father and 20-month-old son.

"It's going to be very devastating," she said.

State Senate President Steve Sweeney, the Legislature's ranking Democrat, said he is calling for local officials, unions and other parties with a stake in Atlantic City to come together in September and begin speaking about how to create a new economy in the city

City officials say the city will eventually make a comeback, but as something other than a gambling hub. Local boosters point to music concerts on the shoreline and new boardwalk attractions, including a Margaritaville restaurant. Statistics show convention business has picked up by more than 10%, and a new convention center is under construction.

Many wonder if those investments will be enough to support a city as its main industry crumbles.

"Obviously, people reading about these issues causes pause," said John Palmieri, who directs the state Casino Reinvestment Development Authority. "I'd like to think a smart investor will take a look at the other things we've been doing."

Mr. Palmieri, like others, had a more immediate problem: trying to fill the cavernous Revel building.

Mr. Guardian has said the Revel could become a college or business.

"This might be Revel's last chapter, but not the last one for this building," the mayor said.

Mr. Palmieri said he couldn't envision the Revel becoming anything other than a casino. "It was really state of the art," he said. Lloyd Levenson, a prominent casino lawyer with 32 years of experience in Atlantic City, said, "I got no clue, no idea."

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