LAWRENCE TOWNSHIP, N.J. (AP) _ Entertainer Merv Griffin has a license to run a casino, but it came with a lecture from regulators angry that he failed to quickly cut ties with an associate who allegedly had indirect links to underworld figures.

Griffin, who bought Resorts International Inc. from Donald Trump last year, will face another challenge in February when he goes before the Casino Control Commission for relicensure of the debt-ridden casino.

Resorts suspended interest payments to bondholders last month, saying it wasn't generating enough cash to pay its bills and make needed repairs to the hotel-casino. Resorts bondholders still must approve a proposed refinancing, which the company says may be necessary to keep it from seeking bankruptcy reorganization.

Griffin said Thursday that in retrospect, he probably would not have bought Resorts.

''I probably wouldn't have done this deal, but I would have done some kind of Atlantic City deal,'' Griffin said.

On Thursday, Casino Control Commission Chairman Walter Read criticized Griffin for maintaining ties with his longtime business manager, Michael Nigris, after learning of accusations that Nigris had ties to organized crime.

Nigris denies the allegations.

Griffin testified that his first knowledge of the allegations came in August 1988, when the investment firm Drexel Burnham Lambert Inc. informed him that Nigris had associations with underworld figures. Drexel was underwriting the financing of the Resorts deal.

Griffin hired his own investigators, who raised similar allegations, and reported them to the state Division of Gaming Enforcement.

Griffin removed Nigris from any involvement in the Resorts transaction and fired Marvin Kern, whom Nigris had hired to monitor the acquisition of Resorts, but did not terminate other business relationships with Nigris until this May.

The entertainer said he retained Nigris because Nigris had not been charged with any crime and was a victim of guilt by association.

Nigris also was interviewed under oath by the state gaming division, and he has launched a legal battle to keep confidential the results of the probe concerning his associations.

Nigris on Thursday condemned the casino commission's comments about him, and rejected suggestions that he had ties to people with links to organized crime.

''I am distressed to learn that the commission has chosen to rely upon and disclose the conclusions of a report that are baseless and unfounded. I have had a long and distinguished business career. At no time have I associated with members of organized crime,'' Nigris said in a statement read by his lawyer, David J. Satz.

Satz would not comment further.

Read said the reasons Griffin gave for firing Nigris, which centered on Griffin's dissatisfaction with the acquisition of a Boston radio station, were ''disturbing.''

''It seems fair to say from the record as a whole that Griffin continued to employ Nigris after the investigative reports because it was in his business interest to do so, and terminated Nigris only when Nigris' business performance became unsatisfactory,'' said Read.

But Read said the one incident should not cause the panel to question Griffin's ''good character, honesty and integrity.''