Morgan Stanley is in discussions with buyers interested in purchasing the Michigan and Mississippi casinos, The Journal said, citing a person close to MGM Mirage.
The investment bank also is vetting potential buyers to determine whether they have adequate access to cash or credit and whether they would likely win permission to operate a casino from state regulators.
Meanwhile, Australian billionaire and gambling magnate James Packer is weighing a stake in City Center, the troubled $8.6 billion Las Vegas development owned by MGM and Dubai World, the Journal said.
The Las Vegas-based MGM Mirage is under pressure to raise cash in to meet obligations on its $13.5 billion in debt and to salvage an $8.6 billion real-estate project that still needs billions in funding, the Journal said.
A sale of the casinos may not go through, and talks could fall apart at any time, The Wall Street Journal said. The newspaper said that some in the gambling industry with knowledge of the situation have characterized the process as akin to a private auction with qualified potential buyers able to make closed bids to Morgan Stanley.
But people close to MGM Mirage say the company does not characterize the process as an auction, and that the company will not sell the casinos at a cut-rate price, the Journal said.
A spokesman for the company could not immediately be reached on Sunday for comment.
Industry analysts told the Journal that a sale of the two casinos -- which have held up well even as Las Vegas has seen a sharp decline in revenue -- could bring anywhere from $1 to $2 billion, providing major relief to the struggling company.
(Reporting by Ilaina Jonas, editing by Martin Golan)