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Magna Closes Sale

3 October 2005

AURORA, Ontario – (PRESS RELEASE) -- Magna Entertainment Corp. ("MEC") today announced the completion of the sale to Colonial Downs, L.P. of all of the outstanding shares of Maryland-Virginia Racing Circuit, Inc. ("MVRC"), a majority-owned subsidiary of MEC and holder of the management agreement for Colonial Downs racetrack in New Kent, Virginia, in accordance with its announcement of the transaction on August 18, 2005. Approval of the Virginia Racing Commission for the sale was received on September 28, 2005. The purchase price of US$7 million in cash and US$3 million by way of one-year interest-bearing demand note was paid on closing to the vendors, majority-owned subsidiaries of MEC, which will also receive as a post-closing adjustment MVRC's prorated 2005 management fees.

MEC further announced today that, in connection with its previously announced sale of Ontario Racing Inc. to Great Canadian Gaming Corp., the parties expect to close immediately following receipt of all regulatory approvals required to consummate the transaction and confirmation of certain discharges of encumbrances affecting the properties being acquired, both expected to occur in October.

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