The eccentric singer has been in talks with a major hotel to launch his pop comeback with a live residency in the city, but negotiations have broken down because of his alleged outrageous financial demands.
A source said: "It is too much. Talks have stalled."
Jackson's requested fee is believed to be twice the amount Celine Dion wanted for her four-year deal with Caesars Palace.
Rumors of the "Billie Jean" singer's proposed residency in the city have been circulating for several months.
Just a few weeks ago, it was reported Jackson wanted a giant robot of himself which shoots laser beams for his shows.
Mike C. Luckman of Luckman Van Pier, an entertainment consultancy firm, revealed the pop superstar had been reviewing plans for a 50 foot robotic replica which would be used to promote his concerts.
Luckman said: "It would be in the desert sands. Laser beams would shoot out of it so it would be the first thing people flying would see."
