“It will take several months to develop and consider the full range of options,” Smith said during the call, “and it will take several more months to properly evaluate these options against the backdrop of the credit market and broader economic conditions.”

Focus on operations

Meanwhile, Las Vegas-based MGM Mirage, which owns or has an interest in 21 properties in the U.S. and Asia, has postponed pre-development work on two proposed projects in Las Vegas and Atlantic City. MGM's 10 casino hotels on the Strip generated about $1.5 billion in third-quarter revenue, down 9% from the same period a year earlier, underscoring the gambling mecca's bad luck.

MGM Mirage's net income plunged 67% to $61.3 million over the same period. Subsequently, Felicia Hendrix, an analyst with Barclays, cut her full-year 2008 earnings per share estimate for the company to $1.29 from $1.43.

“We expect Las Vegas to continue to be weak through 2009, which we believe will pressure MGM's core business,” wrote Hendrix following the company's earnings release. She added that MGM is taking encouraging steps to manage costs and enhance liquidity.

Those efforts include the issuance of $750 million in senior bonds secured by its New York-New York Casino on the Strip. The notes feature a pricey 13% interest rate, and the company plans to use the proceeds to pay down the outstanding balance on its credit facility.

MGM needs to raise $3 billion to complete its $9.2 billion CityCenter project on the Strip, and so far it has secured $1.8 billion and commitments for another $500 million. The sprawling entertainment and residential resort is scheduled to open next year and will be anchored by a 4,000-room casino.

Like CityCenter, other casino hotels opening next year face severe headwinds. Fontainebleau Resorts, for example, is scheduled late next year to open the Fontainebleau Las Vegas, a $2.9 billion project of about 3,000 conventional rooms and 1,000 condo hotel units on the Strip. In early November, Moody's Investors Service warned that declining gaming revenues and softening demand for condo hotels had enhanced the risk that the development wouldn't cover debt service on $2.5 billion in bonds.

Given the tremendous amount of near-term uncertainty, Las Vegas could look a lot different once the economy begins to recover, Ford says. “We don't know to what extent demand will rebound, which hotels will continue in their same format or if ownership configurations are going to change,” he adds. “It's very difficult to put together a forecast other than to say we're not at bottom, and we don't know when the bottom will be.”