Magna to Usher California Into a New Age of Horse Racing

Aggressive race wagering group Magna Entertainment Corp. has embarked on perhaps its boldest initiative to date.

Magna, the brainchild of Frank Stronach, spent much of the last five years buying up tracks and racing properties and in doing so has built an empire larger than that of American racing giant Churchill Downs Inc. On the interactive side, the company has established XpressBet, an advance-deposit wagering system in place for use over the Internet, and HorseRacing TV, a new 24-hour racing channel.

"We want to get the MTV generation out and introduced to the sport."

- Don Erickson
Consultant to MEC

This week, the company announced plans to create a 1.5 million sq. foot racing and entertainment complex in northern California.

The complex, Dixon Downs, will be complete with restaurants, shops and other non-racing features, but the centerpiece will be a system facilitating remote wagering on the races from all corners of the world using a wide array of betting platforms.

Dixon Downs probably won't see any live racing until at least 2006; it could be even later, depending on how quickly the facility is built and how long it takes to get approvals from local governments, according to Don Erickson, a consultant for Magna on the project.

Erickson offers a unique perspective to the project: He is the former mayor of Dixon, Calif., the site for the proposed 260-acre facility.

The complex will host live, thoroughbred horse racing on a one-mile turf track and a one-and-one-eighth-mile dirt track. Proposed spectator accommodations include a 1,800-seat grandstand and a multi-purpose finish-line pavilion with a capacity for approximately 5,000 people. The pavilion is also proposed to include a theater-in-the-round with a seating capacity for stage shows of approximately 2,000.

Magna's plan calls for Dixon Downs to be built in phases. The initial phase would be the building of the race track, finish-line pavilion and related backstretch facilities, including the horse barns and dorms for the use of grooms and trainers working at the track.

Subsequent phases could include department stores and specialty retail stores, restaurants, a multi-screen theater, a hotel and conference center and an office component that would be integrated with the other land uses proposed for the site. Magna estimates total costs of around $250 million.

If the full-phased complex comes to reality, it could mean a huge influx of jobs for Dixon-area residents and increased tax revenues for area municipalities. But Magna's primary goal is reaching a worldwide betting public that never steps foot in the facility.

"Dixon Downs represents one of the first of a new generation of racetracks designed to introduce the tradition and excitement of thoroughbred horse racing to new customers," said MEC's president and CEO, Jim McAlpine.

Erickson said the majority of those new customers would be in their 20s and 30s.

"We want to get the MTV generation out and introduced to the sport," he said. "They can't really relate to the older facilities and don't want to sit in the stands for over four hours to watch 22 minutes of racing."

He added that once Dixon Down's gains a reputation as a destination of choice for young people in California, the betting frenzy would likely spread to younger bettors who turn to the Internet.

"Not everybody can go to Vegas so they go online," he said. "With Dixon Downs it won't be some imitation, they will be able to get the real thing through all of our delivery systems."

But it isn't just the bettors from other areas the facility would attract. Plans call for a three-story 5,000-seat "simulcast center'' for bettors to watch North American races on TV.

McAlpine acknowledged that remote gamblers, and the turnover they will create, will produce most of the track's revenues, but added that a large part of the plan is to serve customers in the immediate area; Sacramento is only 20 miles away.

"It is MEC's objective to provide something of interest to everyone," he said. "We want Dixon Downs to be a resource to the community--a place where those who live and work in Dixon and the surrounding area can come together in an architecturally striking and beautifully appointed setting, be entertained, enjoy a great meal, shop in high-quality stores where service is emphasized and return home excited by the horseracing and entertainment experience."

MEC earlier this month submitted an application for local approval--the first of many steps in a review process that will likely take over a year to complete and will involve a thorough environmental analysis of the project's impact.