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A $29.4 million federal grant to help thousands of former Atlantic City casino workers has gone largely unspent, with few people enrolling in or finding jobs through the state’s re-employment program.

New Jersey has used less than 10% of the grant it received to help the nearly 7,000 workers laid off from casinos in 2014, state records show.

“In the end, the demand for our services was not as great as what we asked the federal government for,” said Aaron Fichtner, deputy commissioner of the state Department of Labor and Workforce Development. “We believe that many people got jobs in other industries on their own or through assistance of other government programs.”

The state agency has spent $2.8 million of the federal grant, which expires in December, on its Atlantic City re-employment program in the past year, Mr. Fichtner said.

The state sent letters to 6,835 laid-off workers alerting them to job training and placement services, and 1,231 people, or 18%, participated. Of those who took advantage of the state-run services, 29% later found jobs, he said.

Kristi Hance, an Atlantic City resident who lost her job as a poker dealer when the Showboat casino-hotel closed in 2014, attended one of the state’s sessions last May with the goal of training for work in the health-care field.

Ms. Hance said the facilitators at the session she attended helped participants with their résumés and gave them job search tips. She sat for an aptitude test, which she said she failed, and the instructors told her she would have to attend 20-hour-a-week, monthlong adult basic-education classes before she could begin job training.

“I don’t have time for that,” said Ms. Hance, who has since found sporadic work at another casino. “I have to put food on the table, for crying out loud.”

Laid-off workers face a weak job market in Atlantic City. The city had a nonseasonally adjusted unemployment rate of 10% in February, down significantly from a few years ago but well above the 4.8% statewide rate, according to the U.S. Bureau of Labor Statistics.

Atlantic City’s casino industry has suffered amid competition from nearby states. In 2014, four of the city’s 12 casinos closed and a fifth shed more than 1,000 workers. Last year, gambling revenue totaled $2.4 billion, compared with $5.2 billion in 2006, according to state records.

In 2014, more than 4,500 of the 6,800 workers laid off from the casinos filed for unemployment insurance benefits, according to the state.

Bob McDevitt, president of the Unite Here Local 54 union that represents Atlantic City’s casino workers, estimated that between a quarter and a third of his members who were laid off are still unemployed or underemployed.

“Like any government money, it probably could have been spent more efficiently,” he said, referring to the federal grant. “But I felt that the state and the federal government reacted about as well as they can to this thing.”

After the layoffs, hundreds of casino workers turned to the Community Food Bank of New Jersey to make ends meet. The organization’s southern branch enrolled 731 former casino workers and their families in a one-year food assistance program, providing supplemental emergency food boxes that served 2,393 people, said Kim Arroyo, director of agency relations and programs.

Casino workers who were laid off in 2014 are no longer eligible for state unemployment benefits, which run out after 26 weeks. Many managers, other supervisory-level employees and card dealers have found new jobs or moved away, Ms. Arroyo said, but the food bank is still helping a large number of former hourly casino employees who worked as wait staff, cashiers and housekeepers.

“It’s hard to find jobs because no one’s hiring,” she said. “A lot of people are saying that they find themselves with skill sets that are no longer usable or relevant.”

According to New Jersey’s Casino Control Commission, there are currently 2,400 open positions at Atlantic City casinos, 600 of which are full-time.

Still, there are “significant barriers” for many of the former casino workers who continue to seek employment, Mr. Fichtner said.

During the past year, the federal grant funded English-language and basic adult education classes for 304 people, he said. Other laid-off workers received training for jobs in the transportation, health-care and office-support industries, he said.

The state plans to spend more of its $29.4 million federal grant but doesn’t yet know how or how much before the grant expires at year’s end, Mr. Fichtner said. There are currently 132 people enrolled in training through the grant.

The state has offered a variety of re-employment services to former casino workers and other New Jersey residents outside of the programs funded by the federal grant, Mr. Fichtner said. The state doesn’t track job placement from those programs by industry, he said.

“We’re confident that the people that needed services, that wanted services from us—that those services were made available to them,” Mr. Fichtner said.

Joe Kelly, executive director of the Greater Atlantic City Chamber, a business advocacy group, said the casino closures of 2014 were painful but inevitable. The casino industry is now at a sustainable level, he said.

“My sense is that the marketplace is in that transition,” he said. “I do think it is improving.”

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