The New Jersey Casino Control Commission granted a casino license to Bally Manufacturing Corp. on the condition that former Bally chairman William T. O'Donnell leave the company he founded 17 years ago.

By a unanimous vote, the five-member commission said that O'Donnell must sell his Bally stock, permanently resign his company posts and have no further dealings with Bally in order for the Chicago-based company to be licensed to own its $300 million Park Place casino-hotel in Atlantic City.

The commission made the decision after finding that O'Donnell had had "questionable and disturbing" association with reputed organized crime figures, and that he participated in an attempt to bribe members of the Kentucky legislature in 1968.

Asked for a comment after the ruling, O'Donnell, 58, offered a quotation from Adlai Stevenson he has cited repeatedly during the six weeks of hearings, "I'm too old to cry and it hurts too much to laugh."

Bally later said it would appeal the decision and said it "remains confident that the good character and integrity of William O'Donnell will be vindicated in further proceedings."

A negative vote on the overall Bally application could have been catastrophic for the company, the nation's biggest slot machine and arcade amusement machine manufacturers.

The New Jersey Division of Gaming Enforcement, the state's casino investigators and prosecutors, recommended against giving Bally a license because of its past underworld ties. Failure to receive at least four affirmative commission votes would have meant Bally would have to sell its 83 percent interest in the Bally's Park Place casino-hotel and stop selling slot machines in the gambling city.

The commission's decision was similar to one it announced in October, when it granted a license to Caesars World Inc. to operate its Boardwalk Regency casino-hotel on the condition that the company's founders -- Chairman Clifford Perlman and his brother, Vice Chairman Stuart Perlman -- leave the company. The commission based that decision on the Perlman's business dealings with reputed Florida mob figures.

In addition to demanding the permanent removal of O'Donnell, the commission said it would issue Bally the license next week only after O'Donnell agrees to forego future Bally stock dividends amounting to approximately $160,000 a year, from his 1.6 million Bally shares, 6 percent of the company's outstanding stock.