1093273--3/14/2008--MAGNA_ENTERTAINMENT

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We currently have a number of debt obligations that we will be unable to meet unless we can extend or restructure existing facilities or raise capital from other sources, neither of which is assured. If we are unsuccessful in negotiations with our existing lenders, we may have to seek protection from our creditors, be unable to continue as a going concern and/or our stock may become illiquid or worthless. There is no assurance that we will be able to complete asset sales or undertake strategic transactions as contemplated under our debt elimination plan announced in September 2007 at acceptable prices or as quickly as originally contemplated. Although our financial statements have been prepared on a going concern basis, there can be no assurance that we will be able to continue as a going concern. As a result of our financial condition, our Board of Directors has a duty to creditors that may adversely affect the interests of our shareholders. We have a history of net losses; we anticipate additional losses and may never become profitable. We expect that during 2008 we will require additional financing to fund our current planned operations and the implementation of our strategic plan, but we may not be able to obtain such financing on satisfactory terms, if at all. Our senior secured revolving credit facility imposes significant restrictions on us. Repayments under our Gulfstream Park project financings and Remington Park project financings impose limitations on the amount of funds available to grow those businesses. Our business is heavily concentrated at certain of our racetracks. We are controlled by MID and therefore MID is able to prevent any takeover of us by a third party. Our relationship with MID is not at "arm's length", and therefore MID may influence us to make decisions that are not in the best interests of our other stockholders. We may not be able to attract or retain the personnel necessary to achieve our business objectives. Although a prospectus supplement related to a given offering of securities may describe the proposed use of proceeds of such offering, our management may have broad discretion over the use of proceeds from any offering of securities described in such prospectus supplement, and may spend the proceeds in ways with which shareholders do not agree. We are exposed to currency exchange rate fluctuations which could aversely affect our profitability as reported in U.S. Dollars. Risks Relating to Our Wagering and Gaming Operations The passage of legislation permitting alternative gaming at racetracks, such as slot machines, video lottery terminals and other forms of non-pari-mutuel gaming, can be a long and uncertain process. A decision to prohibit, delay or remove alternative gaming rights at racetracks by the government or the citizens of a state, or other jurisdiction, in which we own or operate a racetrack, could adversely affect our business or prospects. A decline in the popularity of horse racing could adversely impact our business. Declining on-track attendance and increasing competition in simulcasting may materially adversely affect our operating results. Gaming companies that operate on-line and offer internet-based wagering services may materially adversely affect our operating results. Our strategy of increasing international distribution of North American horse racing may not be successful. Both our pari-mutuel gaming and alternative gaming activities at racetracks are dependent on governmental regulation and approvals. Amendments to such regulation or the failure to obtain such approvals could adversely affect our business. If the court challenge to a November 14, 2007 agreement between the State of Florida and the Seminole Tribe of Florida is unsuccessful, the casino at Gulfstream Park will be forced to compete with an entity that does not have a similar tax burden and, therefore, will likely have significant resources to apply to marketing and other efforts. Any future expansion of our pari-mutuel and gaming operations will likely require us to obtain additional governmental approvals or, in some cases, amendments to current laws governing such activities. The U.S. Federal Government's response to a recent ruling by the World Trade Organization on the U.S.'s Internet gambling policy could adversely affect our financial performance. Uncertainty as to the effect of Congress' attempt to eliminate the federal income tax withholding requirement on winning wagers by foreign nationals could subject us to tax liability. We may not be able to continue to operate our slot facility at Gulfstream Park in the long term if the constitutional amendment adopting the slots initiative is determined to be invalid. At December 31, 2007, our casino facility at Gulfstream Park had a carrying value of $29.6 million. We face significant competition from other racetrack operators, including those in states where more extensive gaming options are authorized, which could hurt our operating results. Competition from non-racetrack gaming operators may reduce the amount wagered at our facilities and materially adversely affect our operating results. We currently face significant competition from Internet and other forms of account wagering, which may reduce our profitability. It is not certain that TrackNet Media will exist beyond the initial five year term provided for in the limited liability company agreement under which it was formed. TrackNet Media may not be able to enter into agreements with additional content owners. Expansion of gaming conducted by Native American groups may lead to increased competition in our industry, which may negatively impact our growth and profitability. Some jurisdictions view our operations primarily as a means of raising taxes, and therefore we are particularly vulnerable to additional or increased taxes and fees. Industry controversies could cause a decline in bettor confidence and result in changes to legislation, regulation, or industry practices of the horse racing industry, which could materially reduce the amount wagered on horse racing and increase our costs, and therefore adversely affect our revenue and operating results. If we pay persons who place fraudulent "winning" wagers, we would remain liable to pay the holders of the proper winning wagers the full amount due to them. Our operating results fluctuate seasonally and may be impacted by a reduction in live racing dates due to regulatory factors. Compliance with new requirements mandated by regulators can represent a significant cost and, in the event those requirements must be met quickly, could lead to operational difficulties. Unfavourable weather conditions may result in a reduction in the number of races we hold. We periodically enter into agreements with third parties over whom we have limited control but whose conduct could affect the licenses that we hold in various jurisdictions. The profitability of our racetracks is partially dependent upon the size and health of the local horse population in the areas in which our racetracks are located. We depend on agreements with our horsemen's industry associations to operate our business. If we are unable to continue to negotiate satisfactory union contracts, some of our employees may commence a strike. A strike by our employees or a work stoppage by backstretch personnel, who are employed by horse owners and trainers, may lead to lost revenues and could have a material adverse effect on our business. Legislation enacted in California in 2002 could facilitate the organization of backstretch personnel in that state. An earthquake in California could interrupt our operations at Santa Anita Park and Golden Gate Fields, which would adversely impact our cash flow from these racetracks. A severe hurricane hitting the Miami area could interrupt our operations at Gulfstream Park, which would adversely impact our cash flow from this track. Real Estate Ownership and Development Risks Our ownership and development of real estate is subject to risks and may involve significant ongoing expenditures or losses that could adversely affect our operating results. Redevelopment projects at our racetracks may result in a write down of the value of certain assets may cause temporary disruptions of our racing operations. Racetrack redevelopment efforts made pursuant to deadlines mandated by state regulators may result in difficulties with integration that adversely impact racetrack performance. We may not be able to complete expansion or redevelopment projects successfully and on time, which would materially adversely affect our growth and our operating results. The recent subprime mortgage crisis in the United States, in which the majority of our properties are situated, could have various negative impacts on our properties, business and our debt elimination plan. We face strict environmental regulation and may be subject to liability for environmental damage, which could materially adversely affect our financial results. We may not be able to sell or otherwise monetize some of our real estate, excess racing real estate and revenue-producing non-racing real estate when we need to or at the price we want, which may materially adversely affect our financial condition. We require governmental approvals for some of our properties which may take a long time to obtain or which may not be granted, either of which could materially adversely affect our existing business or our growth. Risks Relating to Our Securities Should our Class A Subordinate Voting Stock be delisted by NASDAQ for any reason, there could be a material adverse effect on the liquidity of the shares of Class A Subordinate Voting Stock. Our stock price may be volatile, and future issuances or sales of our stock may decrease our stock price. The trading price of our Class A Subordinate Voting Stock could decrease as a result of our issuing additional shares as consideration for future acquisitions or efforts to raise funds to finance operations. Sales or a spin-off or other distribution of our Class A Subordinate Voting Stock by MI Developments Inc. or by certain of our other significant stockholders under our registration statements could depress our stock price. We have no current plans to pay dividends and may never pay dividends.

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1093273--3/14/2008--MAGNA_ENTERTAINMENT_CORP