Trouble in Las Vegas East

Fear of the mob delays casino gambling in Atlantic City

The seagulls have Atlantic City's famous Boardwalk almost to themselves these days. Icy winds and frigid surf have driven away the taffy sellers, the carny barkers, even the sideshow girl who turns into a gorilla before the very eyes of anyone with the 750 price of admission to the Million Dollar Pier. But in hotels along Pacific Avenue, restaurants on Atlantic Avenue and offices along North Carolina Avenue, there is heated talk about options, leases and multimillion-dollar deals--life imitating a Monopoly game. Almost all of the conversations center on the question: When will the first gambling casino open and begin spinning out better days for the fading dowager queen of seaside resorts?

Since New Jersey's voters approved casino gambling for Atlantic City in November 1976, investors have announced plans for 21 casinos, including one in a marina for yachtsmen passing by on the Intracoastal Waterway. Resorts International, which operates two gambling palaces in the Bahamas, has invested $10 million to buy and refurbish the 1,001-room Chal-fonte-Haddon Hall Hotel, installing roulette wheels, craps tables and a high-priced French restaurant. Bally Manufacturing Corp., a Chicago slot-machine maker, has leased the fabled Marlbor-ough-Blenheim Hotel for $850,000 a year from Reese Palley, a wealthy jeweler and art dealer, and Lawyer Martin Blatt. Penthouse Publisher Bob Guccione intends to build a $50 million casino-hotel, possibly on the site of the bedraggled Mayflower Hotel. Playboy Publisher Hugh Hefner is looking for a partner in a planned $69 million casino-hotel on Florida Avenue.

Despite expectations that the boom will begin this spring, however, the first casino probably will not be in operation until the fall, and no more than half a dozen may be in operation by the mid1980s. Even though the casino-hotels will give a powerful economic boost to a deteriorating city that has lost 18,000 residents since 1960 (current population: 41,000) and has a 17.6% unemployment rate, state officials are moving with extreme care in issuing licenses. The object: to keep out organized crime, which is heavily involved in gambling elsewhere.

That could prove impossible. Soldiers from the crime family led by Philadelphia

Mafia Boss Angelo Bruno have long controlled Atlantic City's narcotics, prostitution, loan-sharking and illegal-gambling rackets. Lately, Mafiosi from northern New Jersey, New York City and even Chicago have been buying pizzerias, restaurants, discotheques and other nightspots in Atlantic City. Often they use front men with clean records, producing what Joseph Rodriguez, chairman of the New Jersey State Commission of Investigation, describes as a "mysterious movement of cash and checks through a strange mix of bank accounts and people."

One Domenico Adamita, for example, told the commission that he had borrowed $350,000 to buy Casanova's Disco. Where did the money come from? Adamita's less than satisfactory reply: from a man who kept his money stashed in a bag hidden in his basement. In fact, investigators believe that two cousins of the late New York crime boss Carlo Gambino, one of them a longtime friend of Adamita's, put up the funds.

Among the few hoods to operate in the open was Mobster Michael ("Mustache Mike") Contino of Providence. He offered to become the business partner of Stewart Siegel, who is setting up a school to train dealers and croupiers for the casinos. Contino promised financial help, as well as his services in negotiating a favorable labor contract. Siegel decided that it was an offer he could refuse.

Much of the mob activity involves unions. Hotel and restaurant-employees are being recruited by Teamsters locals from Philadelphia and northern New Jersey with the blessing of Mafia Muscleman Anthony ("Tony Pro") Provenzano, who operates out of semiretirement in Hallandale, Fla. The Association of Public and Private Labor Employees, known as Apple and run by New York Mafiosi, has been organizing employees of Atlantic City's private detective and guard services. A Cincinnati union with ties to Chicago Mafia Boss Anthony ("Big Tuna") Accardo has been signing up bartenders.

Warns Atlantic County Prosecutor Richard Williams about the mob-dominated unions: "They can control who works. It's a source of tremendous unchecked power that, in a town like this, can control the government."

There has been some pushing and shoving among the rival Mafiosi but no shooting or open warfare so far. Some law-enforcement officials expect the top Mafia dons in the U.S. to designate the resort an open city, meaning that any member of the criminal brotherhood or its underworld allies can seek a piece of the action, as is the case in Las Vegas. The Mafia is already tolerating a group of Cuban hoodlums, the Malagamba gang from northern New Jersey, which has gained a foothold in Atlantic City's illicit market for cocaine, marijuana and hookers.

Can New Jersey stop the hoodlum onslaught? Probably not. Concedes Michael

Siavage, executive director of the State Commission of Investigation: "Nobody's claiming that we can eliminate organized crime." But the New Jersey Casino Control Commission is trying to keep the casinos as free of underworld links as possible. Applicants for a casino license are required to fill out an 83-page form, spelling out their personal backgrounds, business history and sources of financing. Then they must go through investigations lasting six to nine months. Only one application, from Resorts International, has been received thus far. The commission is also drawing up stringent regulations for casino operations, including an accounting system designed to prevent anyone from skimming off profits to evade taxes.

Many investors can ill afford these months of preparation and waiting. Resorts International has laid off 600 employees, 75% of its work force at the Chal-fonte-Haddon Hall Hotel. Some investors may be unable to keep up interest payments on their loans unless gambling gets under way soon. Lenders may withhold additional loans until the first casino --probably Resorts International's entry --has been in operation for at least six months. "And by that time," complains one investor, "Miami may have casinos." Not to mention New York's Catskills and Pennsylvania's Poconos.

Thus pressure is growing for the New Jersey Casino Control Commission to move faster, before any investors go bust, or turn to mob moneylenders. The danger, of course, is that a combination of greed and need will overcome caution and good intentions, making it easier for the underworld to penetrate legal gambling in Atlantic City.

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