Kirk Kerkorian's Tracinda Corp. has dropped its attempt to cherry-pick MGM Mirage's Bellagio and CityCenter properties after the corporation announced a new deal with Bahamas casino owner Sol Kerzner to build a multi-billion dollar casino complex on the Strip in Las Vegas.

Many thought that Kerkorian's intention was to nudge MGM Mirage (NYSE:MGM) onto the sale block, to see what his 56% of the remaining company assets might fetch in a buyout-friendly climate. The latest deal, with its implications for increased debt and holdings value, apparently caused him to rethink this move, at least for the moment.

MGM Mirage already has a huge footprint in Las Vegas, but remains very aggressive (i.e. carrying a considerable debt load) in pursuing further growth. Its new $725 million Detroit casino is scheduled to open late this year. The CityCenter complex in Las Vegas has tied up $7.4 billion and won't be ready until 2009, and MGM has put another $1 billion into a cooperative venture, MGM Grand Macau, opening later this year. It is also in talks about another huge development on the Cotai strip in Macau.

Those punters who jumped on the bandwagon at the initial announcement of Kerkorian's interest in Bellagio are jumping back off this morning. MGM Mirage stock was down more than 10% in early trading.

Las Vegas Sands (NYSE: LVS), Wynn Resorts Ltd. (NASDAQ: WYNN), and MGM Mirage (NYSE: MGM) all have huge investments in the Las Vegas of the east, Macau. How large is illustrated by the drop in stock prices when, last Friday, a local China paper reported that Guangdong province was tightening travel restrictions to Macau. LVS finished down 1.56% and Wynn dropped 2.02%. MGM weathered the storm to finish even, possibly buoyed by Kirk Kerkorian's offer last week to buy two prime (non-Macau) properties.

Because the Macau region now surpasses Las Vegas in gambling revenue, punters have taken a distinctly bullish view of development, ignoring the Chinese government's capricious attitude about its people's freedom of movement.

I don't expect the Chinese government to strangle the growth of the Macau region, especially in the run-up to the 2008 Olympics. However, I think that we'll see more occasional setbacks in the stock of these companies, whenever something like this happens to remind investors of the greater risk they assume by piling their chips on red to win.