Atlantic City's mayor said on Tuesday that bankruptcy was "back on the table" after New Jersey Gov. Chris Christie vetoed legislation considered essential to the distressed gambling hub's tax base and cash flow.
"If the state is not able to come up with the funding we need within the next few weeks, we will have no choice but to declare bankruptcy," Mayor Don Guardian said in a statement.
The seaside city's gambling industry, facing increased competition from neighboring U.S. Northeastern states, lost four of its 12 casinos in 2015.
The legislation called for casinos to make fixed payments in lieu of taxes and would have added a measure of stability to the city's rapidly shrinking property tax base.
Lawmakers first passed it in June. Nearly five months later, Christie vetoed it but said he would consider signing it with certain changes he required.