MGM Resorts (NYSE: MGM) will likely be joining its casino brethren in launching a Macau IPO, cashing in on gaming's biggest market. This will be the third Macau IPO after Wynn Resorts (Nasdaq: WYNN) and Las Vegas Sands (NYSE: LVS) sold shares last year to reduce debt. But this one could be just another desperate attempt to lower the debt threatening MGM's very existence.

A tad more than $13 billion of long-term debt was on MGM's balance sheet at the end of the quarter, much of it because of the ill-timed CityCenter project. At a time when Wynn and Las Vegas Sands have been reducing leverage by paying down debt, MGM has been in a holding pattern as results in Las Vegas continue to struggle.

Company

2Q 2010 Long-Term Debt

2Q 2009 Long-Term Debt

Change in Debt

MGM Resorts

$13.05 billion

$12.98 billion

0.5%

Las Vegas Sands

$9.83 billion

$10.64 billion

(7.6%)

Wynn Resorts

$3.23 billion

$4.12 billion

(21.6%)

Source: SEC filings.

The foundation of problems at MGM were laid years ago when it focused on finishing City Center in Las Vegas while Las Vegas Sands, Wynn and Melco Crown (Nasdaq: MPEL) were expanding in fast growing Asia. Those three have enjoyed vastly improved results this year as Chinese visitors gamble more and more each year.

Last year MGM sold Treasure Island and is attempting to sell its stake in Borgata Resort & Casino in Atlantic City to please state regulators. If MGM keeps selling, eventually there will be no properties left to generate cash and pay for the debt piling up. The Macau IPO is expected to raise up to $500 million, a drop in a $13 billion bucket for MGM.

In coming quarters, MGM Resorts has a lot to prove to investors by reducing debt and getting Las Vegas operations back on solid footing. Count me as a skeptic staying far away from MGM's shares until I see a lot of improvement.

What do you think about the future of MGM? Leave your comments below.

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Fool contributor Travis Hoium is long shares of LVS and short LVS call options. Melco Crown Entertainment is a Motley Fool Global Gains pick. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.