Magna Entertainment Corp. Announces Amendments and Extensions of Financing Arrangements

Magna Entertainment Corp. ("MEC" or the "Company") (NASDAQ: MECA; TSX: MEC.A) today announced that it has amended certain of its financing agreements including:

- extending the maturity date of its $40 million senior secured revolving credit facility (the "Senior Bank Facility") with a Canadian chartered bank from May 23, 2008 to July 30, 2008 (subject to certain acceleration provisions);

- extending the maturity date of its bridge loan facility (the "Bridge Loan") with a subsidiary (the "MID Lender") of MI Developments Inc. ("MID"), MEC's controlling shareholder, from May 31, 2008 to August 31, 2008 (subject to certain acceleration provisions) and increasing the maximum commitment available from $80 million to $110 million; and

- extending the due date of its $100 million repayment requirement under the Gulfstream Park project financing with the MID Lender from May 31, 2008 to August 31, 2008 (subject to certain acceleration provisions).

On September 12, 2007, MEC's Board of Directors approved a debt elimination plan designed to eliminate MEC's net debt by December 31, 2008 by generating funding from asset sales, entering into strategic transactions involving certain of MEC's racing, gaming and technology operations, and a possible future equity issuance. Although MEC continues to implement its debt elimination plan, the sale of assets contemplated under the debt elimination plan is taking longer than originally contemplated and the success of the debt elimination plan is not assured.

On March 31, 2008, MID announced that it had received a reorganization proposal on behalf of various shareholders of MID, including entities affiliated with the Stronach Trust, MID's controlling shareholder (the "MID Reorganization Proposal"). The MID Reorganization Proposal contemplates, among other things, MID calling by May 30, 2008 a special meeting of shareholders to consider the proposal and closing the transaction no later than July 30, 2008. The MID Reorganization Proposal is subject to certain material conditions, some of which are beyond MID's control, and there can be no assurance that the transaction contemplated by the MID Reorganization Proposal, or any other transaction, will be completed.

Senior Bank Facility Amendments

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The maturity date of the Senior Bank Facility has been extended from May 23, 2008 to July 31, 2008; provided, however, that if the MID Reorganization Proposal does not proceed for any reason, the maturity date will be accelerated to a date that will be fourteen days prior to the accelerated maturity dates of the facilities with the MID Lender. In connection with the amendment and extension of the Senior Bank Facility, MEC incurred a fee of $0.67 million.

Bridge Loan Amendments

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The maximum commitment available under the Bridge Loan has been increased from $80 million to $110 million and MEC is now permitted to redraw amounts that it repaid prior to May 23, 2008 (approximately $21.5 million). The maturity date of the Bridge Loan has been extended from May 31, 2008 to August 31, 2008; provided, however, that if the MID Reorganization Proposal does not proceed for any reason, the maturity date will be accelerated to one month after the date on which MID gives notice to MEC that the MID Reorganization Proposal is not proceeding.

In connection with the amendment and extension of the Bridge Loan, MEC incurred a fee of $1.1 million (1.0% of the increased maximum commitment). If the MID Reorganization Proposal has not been approved by August 1, 2008 or if the Bridge Loan maturity date is accelerated, there will be an additional arrangement fee of 1.0% of the then current commitment.

Project Financing Amendments

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In connection with the amendments to the Bridge Loan. MEC and the MID Lender also amended the project financing facilities provided to Gulfstream Park and Remington Park. These amendments included extending the deadline for repayment of at least $100 million under the Gulfstream Park project financing facility from May 31, 2008 to August 31, 2008 (during which time any repayments made under either facility will not be subject to a make-whole payment). If the Bridge Loan maturity date is accelerated, the deadline for repayment of the $100 million will also be accelerated to the same date.

Special Committee Process

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Consideration of the amendments to the financing arrangements with the MID Lender was supervised by the Special Committee of MEC's board of directors consisting of Jerry D. Campbell (Chairman), Anthony J. Campbell and William J. Menear. The approval of MEC's board followed a favorable recommendation of the Special Committee. The Special Committee retained independent legal advisors to assist it in its deliberations in respect of these transactions.

MEC will file a material change report as soon as practicable after issuing this press release. The material change report will be filed less than 21 days prior to the closing of the loan amendments. The timing of the material change report is, in MEC's view, both necessary and reasonable because the terms of the amendments were settled and approved by MEC's board of directors on May 22, 2008 and MEC requires immediate funding to address its short-term liquidity needs.

MEC, North America's largest owner and operator of horse racetracks, based on revenue, acquires, develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International, Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty percent interest in HorseRacing TV(R), a 24-hour horse racing television network, and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content.

This press release contains "forward-looking statements" within the meaning of applicable securities legislation, including Section 27A of the United States Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act") and forward-looking information as defined in the Securities Act (Ontario) (collectively referred to as forward-looking statements). These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Securities Act (Ontario) and include, among others, statements regarding the anticipated maturity date of our Senior Bank Facility and Bridge Loan 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 our control, that could cause actual events or results to differ materially from such forward-looking statements. Important 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; our ability to obtain or maintain government and other regulatory approvals necessary or desirable to proceed with proposed real estate developments; increased regulation affecting certain of our non-racetrack operations, such as broadcasting ventures; 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 we will be able to successfully implement our debt elimination plan and comply with the terms of and/or obtain waivers or other concessions from our lenders and refinance or repay on maturity our existing financing arrangements (including the Senior Bank Facility and our Bridge Loan), and there will not be any material adverse changes in: general economic conditions; the popularity of horse racing and other gaming activities; weather and other environmental conditions at our facilities; 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 statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements. 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.