Kirk Kerkorian, who controls MGM Mirage, the second largest casino company in the world (Harrahs is first), is one of Nevada's best poker players.

Actually, I don't know if he ever plays poker with cards today. But when it comes to trading multi-hundred million dollar casino properties, Kerkorian usually comes out a winner.

He started in 1962 by buying 80 empty acres on the Las Vegas Strip for $960,000. It's now Caesars Palace. In 1969, he bought the movie studio, MGM, and turned it into a casino company.

During the last year of George Bush's failed presidency, MGM was hit by a perfect storm of unfortunate, and to some extent unforeseeable, events.

Gas hit $4 a gallon; the housing bubble burst, and lay-offs began. The vacation industry tanked.

The People's Republic of China limited visits from the mainland to Macau to no more than four a year.

And the credit markets froze.

MGM is in the middle of building a city within a city. The $8.6 billion CityCenter on the Strip will have towers, hotels and the 61-story ARIA gaming resort. Speculators were putting down payments on two or three condominium units.

No more.

MGM now has to figure out ways to raise the cash to pay not only its operating expenses, but also its periodic loan payments. Things got so bad that MGM announced that it might not be able to meet its obligations or continue as a going concern.

The last thing it needed at this time was to be sued by its partner in CityCenter, Infinity World Development, a subsidiary of Dubai World.

The partnership always seemed to me to be more than a little strange. What was the government of a Muslim Arab country doing as the co-owner of casinos?

This is the same government that created a worldwide uproar, and was fined $300,000 by the Women's Tennis Association, when it refused to let tennis star Shahar Peer compete in the Dubai Championships, because she is an Israeli.

Dubai World sued MGM and said it was not going to make any more payments into the CityCenter project. The suit was filed four days before the partners were each required to post $100 million.

Why did Dubai World sue?

It said it didn't like the cost overruns and it feared MGM wouldn't be able to keep up its side of the deal.

That might be true.

But Dubai itself had to have a bailout of $10 billion from other Arab governments. One unfortunate cost is that local Muslim leaders have been emboldened to attack Dubai's "Western" culture, like "risqué" clothing.

Maybe Dubai World just wanted out.

More likely, since it had already invested billions of dollars, Dubai World wanted to force MGM to give it an even larger piece of CityCenter. As a government, now $10 billion richer, it could make all the payments itself and cut MGM's share down to a small minority interest.

Kerkorian called the bluff. He had MGM CityCenter file bankruptcy, scaring the lenders and giving him more time to work out his deals. He told the lenders that MGM would make the entire $200 million payment itself.

It is now Dubai World that looks like it is going to be cut out. Of course, MGM still has to figure out how to come up with hundreds of millions of dollars more in the coming months, but it is selling property, like the Treasure Island casino.

Kerkorian might have avoided this problem if he had done a little research on Dubai before agreeing to be its partner.

Before signing a treaty in the middle of the 19th century, the formal name for the Dubai area was the Pirate Coast.

Professor I Nelson Rose is recognized as one of the world's leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website, www. gamblingandthelaw.com.