New Jersey government services from road construction to the lottery are grinding to a halt because a row over the state budget has forced a shutdown.
The state lottery was one of the first services to be hit
The state has been unable to spend money since Saturday after the local legislature failed to approve a budget for the new financial year by 30 June.
Some 45,000 non-essential workers have been ordered to take unpaid leave.
State-run parks, beaches, historic sites, casinos and racetracks all face possible closure by Wednesday.
About 36,000 workers in services deemed essential, such as police, prisons, mental hospitals and child welfare, were told to come to work despite there being no means to pay them.
The dispute centres on a 1% rise in sales tax which Democratic Governor Jon Corzine proposed to help meet a $4.5bn revenue shortfall.
But with many of his fellow Democrats in the state assembly and senate opposing the idea, the deadline - midnight on 30 June - came and went with no budget passed.
Governor Corzine is locked in a budget row with other Democrats
"It gives me no joy, no satisfaction, no sense of empowerment to do what I'm forced to do," Mr Corzine told a news conference.
"There will be people who do not receive the attention that they rightfully deserve from our state government. I don't like it. We will do everything we can to bring this to a short conclusion."
Casinos in the state staved off enforced closure as regulators ruled on Monday they could stay open until Wednesday.
Race horse owners also filed lawsuits against the shutdowns.
A spokesman for the state agency that runs the two racetracks said an appeals court on Sunday allowed them a two-day reprieve.
But with Mr Corzine saying on Sunday that there was "no immediate prospect of a budget", there was little sign of a long-term solution to the stalemate.