EXHIBIT 99.2
MEC [LOGO OMITTED]
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Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario,
Canada L4G 7K1
MEC ANNOUNCES THE SALE OF COLONIAL DOWNS
MANAGEMENT ARRANGEMENT TO COLONIAL DOWNS, L.P.
August 18, 2005, Aurora, Ontario, Canada and New Kent, Virginia - Magna
Entertainment Corp. ("MEC") (NASDAQ: MECA; TSX: MEC.SV.A) and Colonial Downs,
L.P. ("Colonial LP") today announced that they have entered into an agreement
under which Colonial LP will acquire all of the outstanding shares of
Maryland-Virginia Racing Circuit, Inc. ("MVRC"), a subsidiary of MEC. MVRC has
operated Colonial Downs, a thoroughbred and standardbred horserace track in
New Kent, Virginia, pursuant to a management agreement with Colonial LP in
place since April 1996. This management agreement is MVRC's sole material
asset. The sale is subject to approval of the Virginia Racing Commission,
which approval the parties intend to request at the Commission's next
regularly scheduled meeting on September 7, 2005. Under the terms of the
agreement, Colonial LP will pay MEC, through its subsidiaries, US$7 million on
closing and US$3 million by way of one-year interest-bearing demand note.
Colonial LP will also pay MVRC's prorated 2005 management fees and repay
approximately $145,000 plus accrued interest under an existing outstanding
promissory note. MEC will further participate with Colonial LP in certain new
ventures in Virginia, if and as they materialize.
"We have enjoyed a lengthy and productive relationship with the team at
Colonial Downs but this sale of our management arrangement will enable us to
continue to refocus our resources on a strategic goal of delivering prime
racing content, developing our US gaming potential, and expanding our signal
delivery and wagering capability within North America and internationally,"
stated W. Thomas Hodgson, President and Chief Executive Officer of MEC. "We
have agreed with Colonial LP that we will continue to have the use of the
Colonial Downs signal and we hope to include that signal within our growing
domestic and international distribution network."
Jeffrey P. Jacobs, Chairman of Colonial LP, stated "We are appreciative of MEC
for their hard work in helping to grow Colonial Downs and we look forward to a
continued relationship with them and to building on the foundation that has
been laid."
About Magna Entertainment Corp.
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MEC is North America's largest owner and operator of horse racetracks, based
on revenue. It develops, owns and operates horse racetracks and related
pari-mutuel
EXHIBIT 99.2
wagering operations, including off-track betting facilities. Additionally, MEC
owns and operates XpressBet(R), a national Internet and telephone account
wagering system, and Horse Racing TV(TM), a 24-hour horse racing television
network, as well as RaceONTV and Magnabet internationally.
About Colonial Downs, L.P.
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Colonial Downs, L.P. is a wholly owned subsidiary of Jacobs Entertainment,
Inc., a geographically diversified gaming and pari-mutuel wagering company
with properties in Colorado, Nevada, Louisiana and Virginia. Jacobs
Entertainment, Inc. is owned by the Cleveland, Ohio and North Palm Beach,
Florida based Jacobs family. Colonial Downs, L.P. owns the Colonial Downs
racetrack in New Kent, Virginia and seven satellite wagering facilities
located across Virginia.
For more information contact:
Brian J. Budden
Vice President, Corporate Development
Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario L4G 7K1
Telephone: (905) 726-7076
Website: www.magnaent.com