The former owner, Columbia-Sussex Corp., said it might appeal to the New Jersey Supreme Court. But the ruling still marked the strongest endorsement yet of state regulators' rare decision in December to refuse to renew the license of Columbia-Sussex's local operator, Adamar of New Jersey Inc.

The court sided with the five-member New Jersey Casino Control Commission on virtually every issue, including Adamar's financial unsuitability and unsanitary conditions at the casino because of mass layoffs ordered by Adamar.

It was only the second time in Atlantic City's 30-year history of hosting gambling that the commission turned down an operator for a license renewal. It triggered a chain of events, including a Chapter 11 bankruptcy filing May 5 by Columbia-Sussex and the Tropicana Resort & Casino's being put up for sale in January.

"The record strongly supports a finding that Tropicana's conduct was purposeful and characterized by a philosophy or desire to do things its way rather than in the manner required by the New Jersey regulatory scheme," said the 44-page ruling by the Superior Court of New Jersey Appellate Division.

The court added: "Actions that threaten the maintenance of an economically viable and stable operation demonstrate Tropicana's lack of business ability."

"We are pleased with the court's decision," said casino commission chairwoman Linda M. Kassekert. "The judges unanimously agreed that the commission's decision was fully supported by the evidence."

Adamar, which had appealed the decision on grounds that the commission acted wrongly and exceeded its authority, said yesterday that it might take its fight to another level.

"We're reviewing the decision, and based on the review, we will decide whether to pursue an appeal to the New Jersey Supreme Court," said a statement issued by Tropicana Entertainment L.L.C., a division of Columbia-Sussex that oversees Adamar.

The Tropicana continues to operate, employing about 3,600 people working under the trusteeship of former New Jersey Supreme Court Justice Gary Stein, who also has been trying to find a buyer.

Last month, the gambling commission granted Stein a 120-day extension in selling the property and allowed him to start the bidding process all over. Stein argued that the filing of bankruptcy by Columbia-Sussex greatly reduced the amount and quality of bids for the Tropicana and that he needed to start fresh.

The commission earlier had rejected Stein's request to have the Tropicana's assets transferred back to Adamar to potentially prevent a bankruptcy filing by its parent company. Stein argued that such a filing would cast the casino in such a negative light that selling it at a fair price would nearly be impossible. The commission ruled that such a move would return the casino to a disqualified company that had been found unsuitable to hold a license.

In a separate case, the issue of whether Columbia-Sussex duped bondholders and was solely responsible for defaulting on a $960 million loan after being stripped of its New Jersey casino license was being argued in a Delaware courtroom.