Casino operator Genting Malaysia seeks $1 billion in damages after Fox terminated a contract for a branded theme park
Genting Malaysia’s lawsuit against Walt Disney Co. and Twenty-First Century Fox, Inc. is “without merit”, Disney said in a statement on Tuesday after news emerged on Monday that the Malaysian casino operator was suing the entertainment giants over a failed theme park project.
Under a 2013 contract, Fox agreed to license intellectual property for what would have been the world’s first Fox-branded theme park. The attraction was planned to be added to the existing entertainment offering of Resorts World Genting, a sprawling integrated resort perched at the peak of Mount Ulu Kali at 6,000 foot above sea level, an hour’s drive from Malaysia’s capital, Kuala Lumpur.
However, Fox eventually backed out of the the deal to sponsor the theme park and Genting believes that Disney’s $71.3-million acquisition of Fox entertainment assets has caused the contract’s termination. The Malaysian casino operator filed on Monday a 29-page legal complaint to the Central California District Court, saying that Fox, under pressure from Disney, breached its 2013 agreement.
In a statement from Tuesday, Disney said that the claims were “without merit” and “[t]he allegation that Disney, rather than Fox, finally decided to declare a default is simply made up.”
Genting Seeks $1 Billion in Damages
The Malaysian casino company said in its lawsuit that Fox and Disney are liable “for what will exceed a billion dollars in damages attributable to the bad-faith behavior of both Fox and Disney.” It further noted that it has already spent more than $750 million on the theme park.
According to the legal complaint, Genting and Fox’s issues regarding the theme park spanned some years back. The casino operator said in its lawsuit that Fox had attempted to renegotiate the terms of the contract for years and had sought a share of the gate revenue produced by the theme park.
The lawsuit further read that once Disney became the one to “call the shots”, termination immediately replaced negotiation as the main objective. According to Genting, the contract was ended because Disney did not want to associate itself with a gambling company as such association did not fit its “family-friendly” brand strategy.
Shares in Genting Malaysia dropped nearly 17% Monday on news about the lawsuit, wiping out MYR3.4 billion from the casino operator’s market capitalization.
Resorts World Genting currently features seven hotels, a casino with multiple gaming options, dining, convention, and retail facilities, and a number of entertainment options, among others. The property previously included a theme park, which it then closed in 2013.
Genting planned to open its Fox World outdoor theme park in the first quarter of 2019. The company said previously that the attraction would help it increase its annual visits to 30 million by 2020. Resorts World Genting currently welcomes approximately 23 million visitors a year.
According to analysts at Maybank Investment Bank, Genting could still run a successful theme park even without the Fox branding because of its previous experience in operating a facility of this type. The institution noted further that if the operator wins its lawsuit against Disney and Fox, it may even get its theme park for free. However, Japanese brokerage Nomura was less optimistic about the project, saying that without the Fox moniker, the theme park would not be as attractive to visitors.
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