SOUTH EAST ASIA 18
MALAYSIA
Lawsuits, tax hikes dim outlook A more than $1 billion legal dispute with Walt Disney Co. and Fox Entertainment over a planned theme park, legal action from Wynn Resorts and a nasty tax surprise made 2018 a roller coaster of a year for Genting Malaysia, with analysts slashing their forecasts for the group.
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enting, one of the world’s largest casino operators, filed the lawsuit against its U.S. partner in a planned park at its Resorts World Genting property. The Malaysian company is seeking more than $1 billion in damages for breach of contract after 20th Century Fox, whose parent is being bought by entertainment giant Disney, pulled out of the theme park venture. “Unlike Fox, which was perfectly happy to have the Park situated a stone’s throw from the casinos of Resorts World Genting so long as it could continue to extract financial concessions from GENM, Disney wanted no association with a gaming company like GENM due to Disney’s “family-friendly” brand strategy, as
Asia Gaming Briefings | Februay 2019
evidenced by its well documented history of lobbying against the opening of gaming facilities near its parks,” the Genting lawsuit reads. “But seller’s remorse—first by Fox and later by Disney—is not a valid ground for terminating an agreement,” it adds. It was to have been the world’s first Fox theme park and was expected to be the crowning glory of an MYR10.4 billion ($2.4 billion), 10-year, masterplan to overhaul the Resorts World Genting property, with the hope of driving visitation both from home and abroad. Nomura now says it has cut its visitation forecasts by 6 percent for 2019 and 2020 and slashed its theme park revenue forecast by 65 percent, resulting in a cut to earnings of 20
percent next year and the year after. Maybank Kim Eng analyst Yin Shao Yang said he was cutting his earnings forecasts for Genting by 8 percent for 2019 and 10 percent for 2020. Though he added that the termination of the theme park accord is not the “end of the world” for Genting. “Although the theme park will no longer be Fox-branded, we understand that its construction will continue and eventually operate as an “in-house” OTP,” he said, adding the company already has experience in running such attractions. Genting has already invested $750 million of its own money in the park and is claiming additional damages. Maybank argues that if
