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New Jersey voters struck down a ballot proposal to allow casinos outside Atlantic City.

Election results showed the referendum failing 79% to 21% with 78% of precincts reporting Tuesday night.

The measure asked whether two casinos should be allowed to open at least 72 miles north of Atlantic City, which has held a statewide monopoly on gambling halls since 1976. The proposal generated months of debate earlier this year but seemed headed for defeat in recent weeks.

The referendum generated $24 million in campaign spending by opponents and proponents as of Nov. 2, according to a report by the New Jersey Election Law Enforcement Commission.

In late September, the proposed expansion’s biggest financial backers—billionaire investor Paul Fireman and real-estate tycoon Jeff Gural—abandoned their campaign to get the ballot question passed. The men, who want to build casinos in Jersey City and the Meadowlands, said polling showed the ballot measure had no chance of passage.

An October survey conducted by Fairleigh Dickinson University PublicMind found that 24% of respondents supported the ballot question, down from 35% in June.

Francette Hoiditz, 64 years old, said she voted against the referendum because she believed building a casino in the Meadowlands, as Mr. Gural has proposed, would snarl traffic. Atlantic City’s financial problems also factored into her decision, she said.

“I love gambling,” said Ms. Hoiditz, a resident of Newton, N.J. “But we’ve got a mess in Atlantic City and I don’t think we need a mess up here.”

Geovanny Torres, 37, who also lives in Newton, said he supported expanding casinos into northern New Jersey because Atlantic City was too far of a drive from his home. “If you concentrate everything in just one place, I think it’s not fair,” he said.

Southern New Jersey lawmakers and business leaders opposed the ballot question’s passage, saying it would force more casinos in Atlantic City to close and further damage the economy there.

Supporters said the opening of two casinos in northern New Jersey would create thousands of new jobs and generate millions of dollars in tax revenue for the state, some of which would go to Atlantic City.

A second ballot question asked New Jersey voters to amend the constitution to ensure that proceeds from a recent 23-cent state gas-tax increase are dedicated to transportation projects. Election results showed a tight race on the referendum Tuesday night, 52% in favor and 48% opposed with 78% of precincts reporting.

The proposal attracted little attention until last month, when Republican Lt. Gov. Kim Guadagno said voters should reject it as a way of fighting the higher gas tax.

A spokesman for the state treasury said the gas-tax increase would stay in effect whether or not the ballot question is approved.

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