Organized crime seeps into 'Las Vegas East' as 'families' vie for control of racketeering

Like water slowly leaking into a ship's hull, organized crime is gradually seeping into almost every nook and cranny of Atlantic City's "grand casino experiment."

Casino gambling, which began here in May 1978, has fueled the rapid expansion of casino and hotel construction, tourism, and urban renewal. But it also has spurred the biggest tug of war in the nation today between members of the same family or illicit crime organization, top law enforcement officials here say.

Although state laws prevent crime figures from openly acting as casino operators, organized crime may have gained influence in the casino business through labor racketeering, officials say. And they point out that labor racketeering is on the increase here.

Organized crime's activity here -- in the form of drug traffic, loan sharking , real estate involvement, and gangland feuding -- is on the rise in Atlantic City, say law enforcement sources:

* Gangland feuds. Angelo Bruno, who was shot and killed in Philadelphia last month, was murdered because he would not take strong enough action to prevent the infiltration into "Las Vegas East" of rival "families," according to the prevailing theory espoused by law enforcement officials. Thus, it was an "inside job" in the sense that someone from his own crime family shot h im, this view says. Many close observers say they feel that when other members of the Bruno "family," the predominant crime organization in Atlantic City before casino gambling, start to crack down on the initiatives of rivals, there could be much more violence.

* Drug traffic. trafficking in narcotics, especially cocaine, has increased markedly in the past six months, according to assistant Atlantic County Prosecutor Jeffrey Blitz. And, he says, "narcotics traffic requires a high degree of organized crime presence in the sense that opiates are not grown here, the poppy is not grown here . . . so you need an organization to bring it here."

* Loan sharking. "There has been a substantial increase in loan-sharking," Mr. Blitz and other law enforcement officials note. They give two basic reasons for this: (1) Gamblers who lose money often need a quick and easy source of cash to tide them over to the next paycheck -- or the next win; (2) with the tightening credit market nationwide, it has become harder and harder for some area businessmen to get loans from legitimate sources. Up until May 1978, when the first casino opened on the Boardwalk, loan-sharking was almost nonexistent in Atlantic City, the officials say.

* Real Estate. "With real estate there is very little we can do it to keep organized crime out, because it is an unregulated industry," Mr. blitz says, "and if organized crime figures come in and buy land throughout the county . . . there's really nothing we can do -- except monitor it." Unfortunately, the US Internal Revenue Service, the primary agency involved in the monitoring effort, is prohibited by federal regulations from channeling information to local law enforcement officials, a restriction some close observers say prevents taking stronger action against mobsters who buy land with money they have gained from illegal activities.

On the other hand, law enforcement officials say they have been "usually successful" in keeping organized crime out of the city's liquor industry because of the state laws that provide for detailed examinations into the background of prospective licensees.

So, too, the New Jersey Casino Control Commission (CCC), the agency which licenses would-be casino operators, says it believes it has kept organized crime elements from controlling the casinos themselves, even though critics of the CCC charge that some apparently legitimate businessmen who are legally listed as running casinos are really "front men" for organized crime.