AURORA, ON, July 3 /PRNewswire-FirstCall/ - Magna Entertainment Corp. ('MEC' or the 'Company') (NASDAQ: MECA; TSX: MEC.A) today announced that its Board of Directors has approved a reverse stock split of MEC's Class B Stock and Class A Subordinate Voting Stock ('Class A Stock'), utilizing a 1:20 consolidation ratio. Previously, at the May 6, 2008 Annual and Special Meeting of Stockholders, the Company's stockholders authorized the Board of Directors to effect the reverse stock split.

MEC's Class A Stock will trade on the Nasdaq Global Market ('NASDAQ') under the symbol 'MECA.D' for twenty trading days following the effective time of the reverse split, after which trading will resume under the current symbol. MEC's Class A Stock will continue to trade on The Toronto Stock Exchange under the trading symbol, 'MEC.A'. Subject to completing applicable filings, it is currently expected that the reverse split will become effective on or about July 22, 2008.

As a result of the reverse stock split, every twenty shares of MEC Class B Stock and Class A Stock will be consolidated into one share of MEC Class B Stock and Class A Stock, respectively. The reverse stock split affects all shares of common stock, stock options and convertible securities of MEC outstanding prior to the effective time of the reverse stock split. The approximately 58.4 million outstanding shares of Class B Stock and 58.1 million outstanding shares of Class A Stock will be reduced to approximately 2.92 million shares of Class B Stock and 2.91 million shares of Class A Stock, respectively.

Registered stockholders of the Company will receive instructions by mail on how to obtain a new share certificate representing their consolidated Class B Stock and Class A Stock. No action will need to be taken by stockholders who hold shares in 'book entry' form. No fractional shares will be issued as a result of the consolidation. If the consolidation results in a registered shareholder having a fractional interest of less than a whole share, the registered shareholder will receive a cash payment for the value of that interest. The amount of the payment for fractional shares of Class B Stock (each of which is convertible at any time into shares of Class A Stock on a one for one basis) and Class A Stock will be equal to the product obtained by multiplying (1) the average closing sales price of MEC's Class A Stock as reported on NASDAQ for the four trading days preceding the effective date of the reverse stock split times (2) the amount of the fractional share.

The Board of Directors of the Company approved the reverse stock split to allow the Company to regain compliance with the NASDAQ $1.00 minimum bid price continued listing requirement.