Problems cloud Atlantic City's casino-based prosperity

Spurred by the prospect of huge profits and concern lest other Eastern communities legalize casino gambling, construction of gaming houses here is going full blast.

Three casinos now are open, 12 more are being built.

Mayor H. Joseph Lazerow, who might be expected to be elated over all this activity in his formerly moribund resort city, wrinkles his brow. For behind the glitter of the gaming palaces, Atlantic City is approaching its third year of legalized gambling with a new, largely unanticipated, set of problems:

* Acute shortage of city workers. Dozens of city employees, from police officers to deputy mayors, have quit to take higher paying jobs with the casinos. This has left the city government acutely understaffed, according to the mayor and others.

* Proliferating crime. Just as a crackdown on prostitution is paying off, the number of robberies has mushroomed, says Atlantic City Public Safety Commissioner Edwin Roth. He blames the combination of an influx of gamblers carrying a lot of money and a shortage of police.

* Higher housing assessments. While city taxes have been sliced roughly in half in the past 1 1/2 years because of new gambling tax revenues, assessments on houses near the ocean-front casinos have skyrocketed. This is forcing many owners of these houses to sell.

* Unemployment problems continue. Despite promises that the chronically unemployed could be gainfully employed by the casinos, there remains "a hard core of unemployed and underemployed," Mayor Lazerow said. This represents 5, 000 or 6,000 of the city's total work force of 20,000, he elaborated.

* Spending cap. Part of the city administration's staff problems can be traced to a state cap on municipal spending in New Jersey. But Gov. Brendan Byrne, under pressure from politicians whose communities are not growing anywhere near the rate that Atlantic City is, has so far refused to initiate steps to exempt the resort city from the cap.

* Organized crime influx. Despite a new spate of prosecutions of alleged organized crime figures for offenses ranging from murder to loan-sharking, the mob's influence here is becoming more and more widespread, especially in the virtually unregulated real estate industry.

* Illegal gambling continues.One of the chief planks in the campaign to bring casino gambling here was that it would eliminate illegal gambling, long the bane of state and local law enforcement officials. It's still here. Recently, the operator of an Atlantic City pool hall was arrested and changed with promoting illegal gaming his establishment.

Parts of the shiny glass City Hall building seem half empty, apparently because many of the workers have taken casino jobs. "It's becoming more difficult to get the proper people to work for us," the mayor said in an interview. "What we are getting is those laid off from the casinos because they did not show up for work or they were sleeping on the job."

But you won't catch casino developers sleeping on the job, with the money to be made -- the Resorts International casino has grossed $1 million a day on very busy days -- and the threat of casino gambling elsewhere in the East. New York State is expected to have a voter referendum on some form of casino gambling for New York City, the Catskill Mountain resort region, and Niagara Falls next November. Many Pennsylvania politicians are pressing for a casino gambling referendum in that state, eyeing the potential state tax revenues.

Meanwhile, the boom in hotel construction here is reaching way beyond the Boardwalk. Four major hotel companies, including Hilton, are moving to build gambling complexes on undeveloped and facing Absecon Inlet. However, because the land borders wetlands protected by state law, an environmental battle is likely.