[Diamonddog2801]

A piece on the sale of Treasure Island last week. It gives one the sense of deep trouble the major casino operators are in at the moment - and how it's not likely to improve any time soon. I think this year will be the cheapest year for room rates in Vegas since the early 90s.

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NEW YORK, Dec 15 (Reuters) - MGM Mirage said on Monday it agreed to sell the Treasure Island Hotel & Casino on the Las Vegas strip to real estate mogul Phil Ruffin for a total of $775 million to help boost its liquidity.

MGM, a major holding of billionaire Kirk Kerkorian's Tracinda Corp, in October reported a 67 percent drop in quarterly profit.

Casino companies have been hit hard over the past year by slower consumer spending and tight credit markets. MGM's stock, which has plummeted from $86.75 a year ago, rose about 12 percent to $11.98 in morning trading.

"This transaction creates value to our stakeholders through significantly increased liquidity and enhanced financial flexibility," James Murren, chairman and chief executive of MGM Mirage, said in a statement.

Murren recently took over the top job at MGM from former CEO and Chairman Terry Lanni, who retired as questions were raised about his claim that he earned a master's degree in business administration from the University of Southern California.

The purchase price for the Treasure Island Hotel & Casino will consist of $500 million in cash and $275 million in secured notes.

The deal is expected to close by the end of the second quarter of 2009 and MGM Mirage, the world's second-largest casino operator, anticipates reporting a substantial gain on the sale.

FIZZLED

Casino companies have suffered over the past year as the gambling boom in Las Vegas has fizzled, tight credit markets have jeopardized growth plans and the Chinese government has acted to slow down the Macau gambling market.

MGM, which also operates the Bellagio, Mandalay Bay and Circus Circus resorts in Las Vegas, recently postponed development work for its MGM Grand project in Atlantic City and a planned Las Vegas Strip joint venture with Kerzner International and Istithmar.

Las Vegas Strip casinos won $475 million from gamblers in October, 26 percent less than a year earlier.

Statewide, Nevada casinos' take from gamblers fell 22 percent to $905 million for October as the U.S. economic recession continued to cut into consumer spending.

Nevada has seen gambling revenue drop for 10 consecutive months.

The downturn has decimated the stock market value of gambling companies.

Shares of Las Vegas Sands Corp have declined from over $118 a year ago to under $7 on Monday, and the stock of Wynn Resorts Ltd has fallen from over $124 in February to under $42 on Monday.

(Reporting by Mark McSherry, Editing by Maureen Bavdek, editing by Dave Zimmerman)[/q]