ATLANTIC CITY - The New Jersey Casino Control Commission is expected to rule today on whether to renew the Tropicana Casino and Resort's license here in a case that's being closely watched by the rapidly expanding gambling industry.

The Boardwalk casino is requesting that the commission renew its license despite vigorous opposition from the city's largest union over complaints about unsanitary conditions at the casino. The union - Unite Here Local 54 - claims about 900 layoffs since January by the Tropicana's new owner is to blame for diminished customer service there.

The acting director of the state's gaming enforcement agency last week recommended a one-year license for the embattled casino instead of the typical five-year license.

In a stinging assessment, Yvonne Maher, lead attorney for the state Division of Gaming Enforcement, said William J. Yung III, the chief executive officer of Tropicana owner Columbia-Sussex Corp., was "not willing or able to run an Atlantic City casino."

Maher's recommendation - similar to one made by a prosecutor to a judge - came with a laundry list of 26 conditions for the one-year license renewal.

They include requiring the casino to report quarterly to an independent audit committee, that it notify the commission of all customer complaints, and that it report some planned layoffs at least 15 days before their effective dates and all other layoffs at least 10 days before their effective dates.

Besides the shorter license, the division asked the state to levy a "substantial six-figure penalty" against the Tropicana for ignoring a state law that requires a casino to have an independent audit committee.

Yung, the head of Columbia Sussex Corp., said in testimony last month that he ordered layoffs as a result of dwindling revenue. He blamed the revenue decline on new competition from Pennsylvana and New York slots parlors and an April ban that limited smoking to a quarter of the casino floors here.

Last month was not much better for the Tropicana. Total gambling revenue for November was down 21.1 percent at the casino. Slots revenue was down 26.4 percent, almost five times the decrease of table game revenue of 5.6 percent.

Seven other Atlantic City casinos also reported revenue declines last month compared to a year ago mostly because of Pennsylvania slots.

Local 54's attorney, Regina Hertzig, argued for a third party to take over the Tropicana in her closing remark last week, claiming privately-held Columbia Sussex was unfit to run it as a first class facility as specified under the New Jersey Casino Control Act.

The act authorizes the commission "to require each casino licensee to establish and maintain an approved hotel which is in all respects a superior, first-class facility of exceptional quality which will help restore Atlantic City as a resort, tourist and convention destination."

The act was passed in 1977, but has since been amended several times.

The gambling commission allowed into evidence 71 customer complaints against the Tropicana over uncleanliness. Tropicana attorneys had wanted the files sealed.

The Tropicana's license was due to expire at 12:01 a.m., Dec. 1, but the commission extended it until a decision was reached on relicensing.