Magna Won't Renew Greyhound Park Lease

23 December 2004

AURORA, Ontario – (PRESS RELEASE) -- Magna Entertainment Corp. ("MEC") (NASDAQ: MECA; TSX: MEC.SV.A) announced today that it does not intend to renew its lease of Multnomah Greyhound Park ("Multnomah") in Portland, Oregon when the lease expires on December 31, 2004. MEC has operated Multnomah since it purchased the operating rights for the greyhound track in October of 2001. As a result of MEC's decision, there will be no further greyhound racing at the Multnomah facility. In addition to its nterest in Multnomah, MEC has operated horseracing at Portland Meadows since 2001. MEC's long-term lease and operation of the Portland Meadows facility will continue.

Since MEC's entry into the Oregon horse and greyhound racing market in 2001, numerous changes have led to increased competition for the wagering dollar.

- In 2003, the Oregon legislature authorized a 20% increase in the number of video lottery terminals operated in restaurants and taverns throughout the state; and it appears that further expansion of the state lottery will take place in the upcoming 2005 legislative session, via the conversion of the state lottery's current video poker machines into slot machines.

- Indian casinos in Oregon have continued to grow and significantly cut into the market share of the pari-mutuel industry. Recent announcements regarding new Indian casinos, both within Oregon and just north of the Oregon-Washington border, highlight the fact that the competition from Indian casinos will only grow more fierce in the coming years.

- Oregon's off-track betting network has suffered significant declines in business, primarily due to account wagering providers who take wagers on greeyhound and horse races from Oregon residents over the telephone and Internet.

Jim McAlpine, President and Chief Executive Officer of MEC stated, "We entered the Oregon market three years ago with the expectation that we could help the Oregon racing industry achieve substantially improved operating results. Since that time, however, the competitive pressures on the racing industry have continued to mount. Unfortunately, at this point we don't believe the Oregon industry can support both greyhound racing and horse racing. We anticipate that by closing Multnomah and focusing the industry's resources and energy on Portland Meadows we can help bring about enough change to make Oregon's horse racing industry economically viable."

Chris Dragone, general manager of Multnomah stated, "We are disappointed to shut down Multnomah Greyhound Park, but have no alternative given the competitive pressure we face from the state lottery, Indian casinos, and other forms of wagering available to Oregon residents. We are committed, however, to acting in a responsible manner as we phase out greyhound racing. We will continue to work with the Oregon Greyhound Association to keep their adoption kennel open until all of the currently retired Oregon greyhounds have found a home."

MEC is North America's largest owner and operator of horse racetracks, based on revenue. It acquires, develops and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. Additionally, MEC owns and operates XpressBet(TM), a national Internet and telephone account wagering systems, and HorseRacing TV(TM), a 24-hour horse racing television network. Information regarding MEC can be found at http://www.magnaentertainment.com.