Magna Entertainment Corp. announces that it has finalized a definitive slot revenue sharing agreement with the Florida Horsemen and intends to proceed

AURORA, ON, Aug. 9 - Magna Entertainment Corp. ("MEC") (NASDAQ: MECA; TSX: MEC.A)., owner of Gulfstream Park, announced today that it has reached a definitive agreement with the Florida Horsemen Benevolent and Protective Association ("FHBPA") on the purse contributions from slot machine revenues at Gulfstream Park.

Under the terms of the agreement, the FHBPA will receive 7.5% of slot machine revenues at Gulfstream Park once the first 500 slot machines are installed and operational. MEC's initial plans are to have 500 slot machines installed and operational at Gulfstream Park before the end of October 2006. In the event MEC installs and operates 1,500 slot machines, which is the maximum permitted under law, the agreement calls for the FHBPA to receive 6.75% of the first $200 million in annual slot machine revenues and 12.6% of annual slot machine revenues in excess of $200 million.

MEC also announced that it intends to proceed with the development of its slot facility at Gulfstream Park despite the decision rendered yesterday by the Florida District Court of Appeal First District ("FDCAFD").

The FDCAFD reversed a lower court decision granting summary judgment in favor of Floridians for a Level Playing Field ("FLPF"), of which Gulfstream Park is a member. The FDCAFD ruled that a trial is necessary to determine whether FLPF obtained the required number of signatures to place the constitutional amendment on the ballot in November 2004.

MEC believes that yesterday's decision is incorrect and if a trial were to be held, that FLPF would prevail on the merits. If FLPF is ultimately unsuccessful in the litigation, then the statewide vote amending the Florida constitution to permit slot machines at pari-mutuels could be invalidated.

MEC expects that FLPF will explore all available options, including a petition for rehearing, a rehearing en banc and filing a motion for certification to the Florida Supreme Court.

This press release contains "forward-looking statements" within the meaning of applicable securities legislation, including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, among others, statements regarding: our strategies and plans; expectations as to financing and liquidity requirements and arrangements; expectations as to operational improvements; expectations as to cost savings, revenue growth and earnings; the time by which certain redevelopment projects, transactions or other objectives will be achieved; estimates of costs relating to environmental remediation and restoration; proposed new racetracks or other developments, products and services; expectations as to the timing and receipt of government approvals and regulatory changes in gaming and other racing laws and regulations; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a material adverse effect on our consolidated financial position, operating results, prospects or liquidity; projections, predictions, expectations, estimates, beliefs or forecasts as to our financial and operating results and future economic performance; and other matters that are not historical facts.

Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or the times at or by which such performance or results will be achieved. Undue reliance should not be placed on such statements. Forward-looking statements are based on information available at the time and/or management's good faith assumptions and analyses made in light of our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control, that could cause actual events or results to differ materially from such forward-looking statements. Factors that could cause actual results to differ materially from our forward-looking statements include, but may not be limited to, material adverse changes: in general economic conditions, the popularity of racing and other gaming activities as recreational activities, the regulatory environment affecting the horse racing and gaming industries, and our ability to develop, execute or finance our strategies and plans within expected timelines or budgets. In drawing conclusions set out in our forward-looking statements above, we have assumed, among other things, that there will not be any material adverse changes: in general economic conditions, the popularity of horse racing and other gaming activities, the regulatory environment, and our ability to develop, execute or finance our strategies and plans as anticipated.

Forward-looking statements speak only as of the date the statements were made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.

MEC, North America's number one owner and operator of horse racetracks, based on revenues, acquires, develops and operates horse racetracks and related casino and pari-mutuel wagering operations, including off-track betting facilities. Additionally, MEC owns and operates XpressBet(R), a national Internet and telephone account wagering systems, and Horse Racing TV(TM), a 24-hour horse racing television network.