The sell signs have been out for months at MGM Resorts (NYSE: MGM). Las Vegas gaming revenue has remained at depressed levels, competitors continue to take share in Las Vegas, and the company is seriously considering blowing up one of its newest hotels at City Center.

Billionaire investor Kirk Kerkorian has seen enough and announced that he's sold 20 million shares in the company. Of course, the market didn't like that and sent shares tumbling 13% earlier this week.

We've known for some time that Kerkorian, who is still MGM's largest shareholder, had plans to leave MGM behind. He announced in October that he had sold 32 million shares of MGM and may be willing to part with the rest. Besides the terrible timing in the market, the move out of MGM seems to be a slow and steady one.

Still the worst bet in town
So, this is a big discount that investors should jump on, right? Not so fast.

If the U.S. economy does take a turn for the worse, as the market fears, MGM will be the hardest hit. Most of MGM's revenue still comes from Las Vegas, and if we remember what happened to gaming, room rates, and earnings during the last recession, the damage wouldn't be pretty.

MGM also has the least exposure to Macau, where gaming is growing like a weed. MGM's stake in its Macau casino is only 51%, lower than Las Vegas Sands (NYSE: LVS) and Wynn Resorts (Nasdaq: WYNN) or a pure play like Melco Crown (Nasdaq: MPEL).

Foolish bottom line
The recent market downturn and sale by Kerkorian hasn't changed anything about MGM; it's just brought the company's problems to the forefront. And despite the recent discount, I wouldn't make a big bet on MGM Resorts.

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