"We believe that due to a number of factors affecting consumers, including but not limited to a slowdown in global economies, contracting credit markets and reduced consumer spending, the outlook for the gaming and hospitality industries remains highly uncertain. Based on these adverse circumstances, we believe that the company will continue to experience lower than expected hotel occupancy rates and casino volumes," Riviera Holdings said in its quarterly financial report. "As a result of the economic factors and the defaults on the credit facility, there is substantial doubt about our ability to continue as a going concern."

Through the first nine months of the year, income from its Vegas operations fell 91.1% to $900,000 from $10 million in the same year-earlier period, on a 28.9% decrease in net revenues from the resort to $72 million from $101.2 million. The decrease is principally due the net revenue decline being insufficiently offset by reductions in costs and expenses.

The company has been in default of its $245-million credit agreement since February. In March, the company said it will have to file for Ch, 11 bankruptcy protection from creditors if it is unsuccessful in renegotiating the loan terms with its creditors. As a result of the defaults, the interest rates on its debt have gone up. The term loan interest rate is now 10.5% and the revolver interest rate is now 6.25%. The company is also is in default with regard to a credit swap agreement with Wachovia.