Chicago officials hope nights on the court can keep young men out of jail.

City and federal officials here are encouraging 160 young men from two of the city’s roughest public-housing projects to steal, shoot and run into the dead of night.

It’s not gang-related corruption. It’s anti-gang basketball.

In the latest manifestation of an idea that has been keeping ghetto youths from turning to crime in Maryland for four years, the Chicago Housing Authority last week began sponsoring a basketball league that plays its games between 10 p.m. and 2 a.m., when gang activity is at its peak.

Hundreds of spectators, including Chicago’s Mayor Richard M. Daley and Housing and Urban Development Secretary Jack Kemp, attended the opening game at Malcolm X College, when the Hornets outscored the Bulls, 39 to 30.

If successful, the housing authority hopes to extend the Midnight Basketball League to all of the city’s public-housing developments. Other cities are also watching. Los Angeles Mayor Tom Bradley’s office is already working with the Amateur Athletic Foundation to set up a late-night league later this year.

Late-night basketball is the brainchild of G. Van Standifer, the former town manager of Glenarden, Md., who now works full time encouraging the establishment of more leagues. He has had inquiries from about 30 cities so far, he said.

He hit upon the idea because “we were having some awful problems (in Glenarden), particularly in the wee hours of the morning.” The number of crimes reported to the Prince Georges County Police, of which Glenarden is a part, dropped from 1,417 incidents in 1984 to 770 in 1988. Standifer can’t prove it, but he is sure the late-night alternative contributed to the overall drop in crime.

By all accounts, the Chicago tip-off met all expectations.

“Mostly I’d be home being bored,” said John Knox, 22, a Bullet.

“It’s keeping me away from gang activity,” said Dana Smith, 24, a former gang member and prison inmate turned Lakers team member.

Even though only the Bulls and the Hornets got a chance to show their stuff on the basketball court last Tuesday night, all 160 players basked in the fanfare celebrating their commitment to the league. Throughout the regular season all teams will either practice or play games two nights a week.

“I wouldn’t say every kid in the league is a gang banger, but he has the potential of becoming a gang member by virtue of the fact that he lives in the projects,” said Deputy Police Chief Sherwood Williams, who heads the police department’s Special Functions Group, which focuses on the gangs and public-housing units.

The players in the league are getting more than a chance to burn some energy late at night. They are also receiving drug and education counseling, job training and pep talks.

Smith is looking forward to a job interview set up with the help of the league.

“We’re using basketball as a vehicle to get them in the door,” said Milton Brown, president of Malcolm X College.

Malcolm X, a two-year city college, collaborated with the housing authority as part of a larger effort to position itself as an educational, social and cultural center for the crime-ridden West Side area.

“We will strongly encourage all of them to enroll,” Brown said. Financial aid will be worked out for anyone interested, he said.

The league focuses on individuals between the ages of 17 and 25 who haven’t turned to crime, yet. “This is a preventive program not a rehabilitative program,” explained Gil Walker, league commissioner and employee of the housing authority.

The league parrots the organization, regulations and guidelines of the National Basketball Assn. Team names are the same and team sponsors--individuals willing to donate $2,000 to help finance the league and to serve as positive role models--are referred to as owners.

But the league parts from the professionals by placing the emphasis on social development rather than on ability.

Everyone plays in every game. Arrangements to miss games can be made if it is because of a schedule conflict with a job. A fist fight on the court or too many practices blown off could mean expulsion from the league.

“It’s about playing by the rules,” explained Roland L. Livney, a bond salesman for Bear, Stearns & Co. and “owner” of the Lakers.

It’s also about finding something that will work to keep violence and drugs from undermining the city’s minority youth.

“We’re on the verge of losing the entire black generation,” said Don Jones, “owner” of the Knicks. “ . . . Some of these guys might be our future leaders.”