IN AUGUST OF 1977, THE STATE COMMISSION OF INVESTIGATION (SCI) HELD PUBLIC HEARINGS IN RELATION TO THE DEVELOPING MOVEMENT OF ORGANIZED CRIME INTO ATLANTIC CITY, PARTICULARLY IN REGARD TO LEGITIMATE ENTERPRISES BEYOND THE SCOPE OF CONTROL OF THE CASINO CONTROL ACT. THE PUBLIC HEARINGS CONFIRMED THE FACT OF INFILTRATION OF THE CIGARETTE VENDING BUSINESS AND THE TAVERN BUSINESS, AS WELL AS THE ATTEMPTED INFILTRATION OF A CASINO GAMING SCHOOL BUSINESS AND A POTENTIAL CASINO-HOTEL COMPLEX. BECAUSE OF THE CURRENT REVIEWING AND RULEMAKING ACTIVITY OF THE CASINO CONTROL COMMISSION, THE SCI OFFERED NO COMMENT ON THE LAST TWO AREAS OF INFILTRATION MENTIONED ABOVE. WITH REGARD TO THE CIGARETTE VENDING MACHINE BUSINESS AND THE TAVERN BUSINESS, HOWEVER, LEGISLATIVE AND ADMINISTRATIVE RECOMMENDATIONS ARE PROPOSED IN THIS REPORT. DETAILS ARE REPORTED ON THE INFORMATION RECEIVED AT THE PUBLIC HEARING WHICH REVEALED ASSOCIATIONS OF KNOWN ORGANIZED CRIME FIGURES WITH BUSINESSES OPERATING OR APPLYING FOR OPERATION IN ATLANTIC CITY. BECAUSE BOTH CIGARETTE DISTRIBUTION AND LIQUOR SALES REQUIRE LICENSING BY THE STATE, IT IS RECOMMENDED THAT CRITERIA FOR LICENSING IN BOTH OF THESE AREAS BE EXPANDED SO AS TO EXCLUDE BUSINESSES IN ANY WAY CONNECTED WITH ORGANIZED CRIME FIGURES. IT IS RECOMMENDED THAT THIS BE DONE BY REQUIRING THAT ALL ENTERPRISES INVOLVED IN CIGARETTE AND LIQUOR SALES APPLYING FOR LICENSING REVEAL THE NAMES OF ALL PARTIES ASSOCIATED WITH THE BUSINESS THROUGH LOANS OR OTHER FINANCIAL CONNECTIONS. FURTHER, SHOULD ANY OF THOSE PERSONS HAVE ASSOCIATIONS WITH ORGANIZED CRIME, LICENSING WOULD NOT BE GRANTED. SPECIFIC STATUTORY AND REGULATORY MODIFICATIONS ARE PRESENTED. EXHIBITS PRESENTED AT THE PUBLIC HEARINGS ARE INCLUDED.