Magna Entertainment Corp. announces entry into multi-year technology license agreement for STREUfex(TM) horse bedding product

AURORA, ON, Aug. 27 /PRNewswire-FirstCall/ -- Magna Entertainment Corp. ("MEC") (NASDAQ: MECA; TSX: MEC.A) announced today that its wholly-owned subsidiary, FEX Straw Manufacturing Inc. ("FEX"), has entered into a Technology License Agreement with Premier Equine Products Pty Ltd. ("PEP"). Under the agreement, FEX has licensed to PEP the exclusive right to manufacture and sell STREUfex(TM) horse bedding product in Australia, New Zealand, Hong Kong, Macau, Japan and Singapore for 20 years. In consideration, FEX received a one-time up-front license fee and will receive ongoing royalty fees over the duration of the agreement based on the number of tons of STREUfex manufactured by PEP. In the event that PEP enters into any sublicense agreement, FEX will further be entitled to a sublicense fee as well as similar annual product sales-based fees.

"We are thrilled at this tremendous international growth opportunity for our highly absorbent, environmentally friendly product," says Johann Payerl, General Manager of FEX, "Entering into an international joint venture with Premier Equine Products speaks volumes about the superior nature of STREUfex. We look forward to working closely together with our new partner to grow the business in Asia and Australia."

"The STREUfex product fits very well with our focus on sustainable environmental performance and has been very successfully trialed with some of Australia's leading trainers," says Tim Rourke, Director of Premier Equine Products, "and we are excited to build on its North American and Austrian success in the Australian and wider South East Asian Region. We have started what we expect to be a mutually beneficial long-term relationship and partnership with FEX."

FEX manufactures STREUfex horse bedding for the North American market from a state-of-the-art manufacturing facility in Lumberton, North Carolina. STREUfex is a straw-based bedding product with superior absorption that decomposes quickly into organic fertilizer. The STREUfex product was introduced to North America in the first quarter of 2004 and currently supplies horse bedding to Gulfstream Park and the Palm Meadows Training Center.

Premier Equine Products is an Australian company that specializes in the provision of feed and bedding solutions, and the associated products and services, to the equine industry. The company is focused on the timely delivery of consistent, high quality and cost effective products to the equine industry.

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(TM), 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 media 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 expected impact of entering into the technology license agreement.

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 the Company's control, that could cause actual events or results to differ materially from such forward-looking statements. Factors that could cause actual results to differ material y 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, 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 there will not be any material adverse changes: in general economic conditions, the popularity of horse racing and other gaming activities, 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.