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Magna Reports Q2 Earnings, Income Down

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                                   Three Months Ended      Six months Ended
                                        June 30,                June 30,
                                    2002        2001        2002        2001
                                    ----        ----        ----        ----
                                                  (unaudited)

    Revenues                    $128,168    $113,192    $376,967    $357,718

    Earnings before interest,
     taxes, depreciation and
     amortization ("EBITDA")    $  7,536    $ 11,019    $ 44,582    $ 55,641

    Net income                  $  1,082    $  2,237    $ 19,697    $ 24,705

    Diluted earnings per share  $   0.01    $   0.03    $   0.21    $   0.30

    Results Excluding the Sale
     of Non-Core Real Estate

    Revenues                    $122,064    $103,198    $370,226    $321,573

    EBITDA                      $  5,767    $  6,025    $ 42,463    $ 38,589

    Net income (loss)           $     45    $   (774)   $ 18,451    $ 14,576

    Diluted earnings (loss)
     per share                  $      -    $  (0.01)   $   0.19    $   0.18

           All amounts are reported in U.S. dollars in thousands,
                          except per share figures.
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In announcing these results, Jim McAlpine, President and Chief Executive Officer of MEC, remarked: "We are pleased with our improved racetrack operating and financial performance for the six months ended June 30, 2002. Revenues and EBITDA, excluding the sale of non-core real estate for the six months ended June 30, 2002, improved 15.1% and 10.0%, respectively, over last year.

To date in 2002, MEC has successfully completed our first public offering, arranged for an additional credit facility and entered into agreements to acquire three significant racetrack operations, including our first Canadian racetrack and gaming operation."

The following strategic developments have occurred to date in 2002:

- We launched our new Internet account wagering platform XpressBet in January. On January 24, XpressBet was granted a license to conduct account wagering in the State of California and commenced operations on January 25.

- In February, we entered into a joint venture called Racetrack Television Network ("RTN"), which is one-third owned by MEC. RTN is a direct to home private subscription satellite service offering up to eight channels dedicated to horseracing. In July, we launched HorseRacing TV, a new television channel focused exclusively on horse racing. This channel is presently carried on RTN. We are working to achieve broader distribution through conventional satellite and cable systems.

- In March, we entered into an agreement to acquire substantially all of the operations and related assets of Lone Star Park at Grand Prairie near Dallas, Texas, subject to regulatory approvals.

- In April, we completed a public offering of 23 million Class A Subordinate Voting shares, which raised net proceeds of $142.1 million.

- In May, we increased our bank lines of credit by arranging a short-term credit facility in the amount of $75 million.

- In June, we entered into an agreement to acquire all the shares of Flamboro Downs Holdings Limited, the owner and operator of Flamboro Downs, a harness racetrack located near Hamilton, Ontario, 45 miles west of Toronto, subject to regulatory approvals. Flamboro Downs also houses a gaming facility of 752 slot machines operated by the Ontario Lottery and Gaming Corporation.

- Most recently and subsequent to June 30, 2002, we announced an alliance with the De Francis family to own and operate Pimlico Race Course, home of the Preakness, and Laurel Park, which are operated under the trade name "Maryland Jockey Club". The acquisition is subject to regulatory approvals and legislative review.

Our racetracks operate for prescribed periods each year. As a result, our racetrack revenues and operating results for any quarter will not be indicative of our revenues and operating results for the year. We expect that these seasonal fluctuations will reduce over time as the full impact of our acquisition, off-track betting ("OTB") and account wagering initiatives are realized.

Our financial results for the second quarter of 2002 reflect the full quarter's operations for all of MEC's racetracks and related pari-mutuel wagering operations. The comparative results for the second quarter of 2001 do not reflect the operations of XpressBet(TM) California, which commenced on January 25, 2002, Portland Meadows, which commenced activity in July 2001 and Multnomah, which was acquired in October 2001.

Revenues, excluding proceeds on the sale of non-core real estate, for the first six months and second quarter of 2002 increased 15.1% to $370.2 million and 18.3% to $122.1 million from the prior year period, respectively. The higher revenues in the second quarter of 2002 reflect primarily the additional live race days at Gulfstream and Santa Anita, the launch of XpressBet(TM) in the California market and the acquisition of Multnomah in the fourth quarter of 2001.

EBITDA, excluding gains on the sale of non-core real estate, increased 10.0% to $42.5 million for the first six months ended June 30, 2002 and was $5.8 million for the second quarter ended June 30, 2002 compared to $6.0 million in the prior year period. Operating cost increases related to insurance and utility costs have negatively impacted results in 2002. Insurance costs increased $1.1 million and $1.8 million, respectively, for the second quarter of 2002 and on a year to date basis compared to the prior year periods. Utility costs increased $0.5 million and $0.8 million, respectively, for the second quarter of 2002 and on a year to date basis compared to the prior year periods.

Revenue on the sale of non-core real estate in the second quarter of 2002 was $6.1 million, resulting in EBITDA of $1.8 million compared to revenue in the second quarter of 2001 of $10.0 million and EBITDA of $5.0 million. We continue to market our remaining non-core real estate, however, the timing of future sales is uncertain.

Net income, excluding gains on the sale of non-core real estate, increased 26.6% to $18.5 million in the first six months of 2002 compared to 2001 and increased $0.8 million in the second quarter of 2002 compared to the 2001 quarter. Diluted earnings per share, excluding gains on the sale of non- core real estate, increased $0.01 per share for the second quarter of 2002 compared to the prior year period.

Net income on the sale of non-core real estate was $1.0 million in the second quarter of 2002 compared to $3.0 million in the comparative period. Diluted earnings per share relating to the sale of non-core real estate were $0.01 in the second quarter of 2002 compared to $0.04 in the comparative period.

During the second quarter of 2002, cash generated from operations before changes in non-cash working capital was $7.2 million. Total cash used in investment activities during the quarter was $16.5 million, which included real estate property and fixed asset additions of $20.2 million and other asset additions of $1.9 million, offset by proceeds on the sale of real estate of $5.6 million.

Over the balance of the year, we will continue to focus on earnings growth through the implementation, throughout our operations, of best practices and common systems, utilization of our corporate purchasing power to reduce costs, improved production and distribution of our simulcast program, growth of our account wagering business and sales of non-core real estate holdings.

One of the main priorities over the balance of the year is to prepare for Gulfstream Park's 2003 winter meet. Our goal is to enhance Gulfstream's position as one of the premier winter racing venues in the country. In order to accomplish this, several months ago we began construction of Palm Meadows, a world class thoroughbred training facility located approximately 40 minutes north of Gulfstream. As previously reported, MEC is also considering a major redevelopment of Gulfstream's facilities as part of our Florida strategy. Our first priority is to provide high quality racing for the enjoyment of our racing and wagering customers. This will result in higher revenues, increased purses for our horsemen and enhanced returns for our shareholders. In order to ensure high quality racing at Gulfstream, we have decided to focus first on completing Palm Meadows and to defer any decision concerning the Gulfstream redevelopment for the time being.

MEC, one of the largest operators of premier horse racetracks in the United States, acquires, develops and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities, and owns and operates a national account wagering system called XpressBet.

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