James Crosby; Launched Casinos in N.J.

James Crosby, who parlayed a small paint company into the major gaming corporation that launched gambling in Atlantic City nearly eight years ago, has died at age 58.

Crosby, board chairman of Resorts International, died Thursday at New York University Hospital in New York City after respiratory surgery. He had suffered from chronic emphysema for many years.

On May 26, 1978, Resorts International opened the city’s first gaming hall, at the time the only legal American casino outside Nevada.

“He showed the way for the rest of the industry,” said Walter N. Read, chairman of the Casino Control Commission.

A bachelor with a craggy face, raspy voice and boyish manner, Crosby was well known in business circles here, in New York and in the Bahamas.

The son of a New York lawyer, investor and former assistant U.S. attorney general, Crosby graduated from Georgetown University in 1949 and worked on Wall Street for a brokerage house until his family took over the struggling Mary Carter Paint Co. in 1958.

Crosby entered the casino business in the Bahamas about 1966, teaming with supermarket heir Huntington Hartford to turn obscure Hogs Island near Nassau into the lavish Paradise Island.

Where the millionaire Hartford failed, Crosby succeeded in wangling permission from Bahamian officials to build a bridge to the resort. The span, personally owned by Crosby, turned the tiny island into a moneymaker, and transformed Mary Carter Paints into Resorts International.

Over the years, guests at the lavish resort included Howard Hughes, fugitive financier Robert Vesco and the last Shah of Iran, Mohammed Reza Pahlavi.

Crosby came to Atlantic City in the spring of 1976, several months before New Jersey voters passed a referendum approving legalized casino gaming.

He invested about $50 million in the renovation of Chalfonte-Haddon Hall, a famed old hotel, and had the company contribute more than $250,000 to the $1.3 million campaign to legalize gambling here. Crosby also took an option on a 56-acre urban renewal tract in the decaying city.

From Resorts International Casino Hotel’s opening through February, 1986, the 750-room gaming hall has won $1.75 billion from gamblers. It was the only casino in Atlantic City until June, 1979. In the last 10 years, Resorts has acquired enough property to also become the largest private landholder in Atlantic City.

The corporation also owns at least 10% of Pan Am World Services stock.

From the outset, Resorts was accused of misdoings, originally linked to crime boss Meyer Lansky and the Cuban casinos of the 1950s. But nothing was ever proved against Crosby or his company.

Financial analysts had long said the death of Crosby could make the company vulnerable to takeovers and that was reflected Friday when Resorts’ stock jumped $17 7/8 a share to $67 on the American Stock Exchange.