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The squalid underside of legalized gambling is the backdrop for Louis Malle's new tragicomedy, "Atlantic City." The story centers on several young losers, caught in a sleazy world of casinos, drug dealing, and organized crime; and an old reprobate who comes out on top even though he approaches everything in life exactly backwards. It's regrettable that Malle's deliberately "objective" approach veers into amorality at times; at the end, even killing is taken much to lightly for comfort. I also wonder why the screenwriter, John Guare, drags in hippie cliches to satirize the kids of the tale -- couldn't he find any fresher foibles? On the plus side, though, the author of "The House of Blue Leaves" still has an ear for outrageous dialogue. Malle's visual style is as elegant as ever, and Burt Lancaster delights even when his ch aracter falters.

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