With regard to the additional 2,000 rooms that will come to market this year with the opening of Wynn Resorts Encore tower, Loveman said the new tower may have a modest effect on Caesar's--because it, too, is a higher-end product--but not much on the rest of the portfolio. The rest of the portfolio will be more affected by competitors offering up rooms for $49 to $59 per night, he said. "That's a much more profound issue," he said.

Riviera Holdings, which owns the budget-oriented Riviera casinos in Las Vegas and Colorado, also announced earnings this week. The company reported a 3Q '08 net loss of $3.5 million, down from an $18.3-million loss in 3Q '07. Net revenue for the quarter declined 23% to $40.2 million, including a 20% revenue drop at Riviera Las Vegas.

Earnings at Riviera Las Vegas fell 52%. Casino revenue fell 21%, primarily due to lower slot revenue, while hotel revenue fell 18% on a 700 basis-point drop in occupancy to 87%. Room rates fell about $4 to $75.17. Excluding unoccupied rooms, revenue per room was $65.44.

"This quarter was more challenging than the preceding quarter as business conditions continued to deteriorate," Riviera CEO Bill Westerman said. "As a result of strong competitive pressure and weak customer demand, we lowered our Las Vegas hotel room rates in order to increase hotel occupancy and overall property revenues. The lower Las Vegas hotel rates and overall casino revenue decrease at both properties impacted our profit margins despite significant cost cutting."

Westerman assured analysts that the company is well positioned to weather the economic downturn thanks to a $225 million bank loan at just under 7.5% interest that doesn't come due until June 2014. The company also has a $20 million revolving credit line.

In addition, he said the company suspended its room renovation effort and has been cutting costs, including management-level jobs at both properties. The company has renovated rooms in four of its five hotel towers at its Las Vegas property at a cost of nearly $19 million and also opened a new $11-million sports book earlier this year.

Dan Lee, chairman of Pinnacle Entertainment, which is based in Las Vegas but has no casinos there, also spoke with analysts on Friday after posting a third quarter loss and indefinitely suspending plans to build a major development in Atlantic City due to credit market conditions and increased competition.

Lee speculated that Las Vegas "wouldn't be in quite as much trouble if they hadn't levered it up so much," he said, mentioning Wynn Resorts as the exception. "If you have that much leverage and then your results fall a little bit shy, you've got a problem."

Lee says Pinnacle could take a 50% hit to its EBDIT (earnings before depreciation, interest and taxes) before it had trouble covering its interest expense. "But some of these other companies, a 10% decline in EBDIT and they can't cover the interest expense," he said. "Or, actually worst case and I have one in mind, they had anticipated that a renovation of their facility would double their EBDIT, and so they borrowed enough money that they actually needed EBDIT to cover the double, in order to cover their interest expense. So there were some big dreamers in that bank line and now the renovation is done and the EBDIT if flat, and I think they're headed for the wall. So there's going to be a few of those."

As to whether that would represent an acquisition opportunity for those that are more liquid, Lee doubts it. "I mean somebody who paid nine or 10 times cash flow for an asset, doesn't really want to spin around and sell it at four times cash flow," he says. "And, if they borrowed most of the money, then what happens is they eventually go bankrupt and the lender then has the asset they don't want to sell at four times cash flow. A lot of times you have to go through two or three reorganizations before anybody gets realistic about what it's worth."