Churchill Downs Incorporated and Magna Entertainment Corp. to Work Cooperatively in Bid for New York Racing Franchise

Churchill Downs Incorporated (“CDI”) (NASDAQ: CHDN) and Magna Entertainment Corp. (“MEC”) (NASDAQ: MECA; TSX: MEC.A) today announced that they have entered into an agreement to cooperate in the bidding process for the New York racetrack franchise, which is currently held by the New York Racing Association and will expire Dec. 31, 2007. In addition, CDI and MEC look to join other New York racing and business entities interested in forming a larger group to bid on the racing franchise that includes Aqueduct Racetrack, Belmont Park and Saratoga Race Course. In June, the State of New York initiated a process to formally invite bids for the franchise.

CDI and MEC share a common view regarding the importance of New York racing to the overall success of horse racing in North America. As the owners of many of North America’s other premier racing venues – including Churchill Downs, Santa Anita Park, Gulfstream Park, Arlington Park, the Maryland Jockey Club, Fair Grounds Race Course, Calder Race Course, Lone Star Park and Golden Gate Fields – the two companies have extensive experience acquiring and upgrading racetrack facilities; managing and marketing major racing events, including Triple Crown races; building positive relations with horsemen; and growing their respective businesses. The two companies have already partnered in Racing World, a London-based satellite television service that delivers North American horse racing content to customers in the United Kingdom and Ireland.

Robert L. Evans, CDI’s newly appointed president and chief executive officer, said, “By working cooperatively, we can improve and enhance customers’ entertainment experiences at the three racetracks that make up the New York franchise. Our companies have already experienced the benefits of working cooperatively, and our affiliation will maximize the contribution we can make to the future success of New York racing.”

“It is not the goal of either MEC or CDI to control New York racing,” added MEC Chairman Frank Stronach. “Our intention is to provide our companies’ collective expertise to a bid group comprised of prominent New York enterprises and others with the capability and desire to win the franchise and the commitment and resources needed to revitalize New York racing.”

Churchill Downs Incorporated (“CDI”), headquartered in Louisville, Ky., owns and operates world-renowned horse racing venues throughout the United States. CDI’s six racetracks in Florida, Illinois, Indiana, Kentucky and Louisiana host many of North America’s most prestigious races, including the Kentucky Derby and Kentucky Oaks, Arlington Million and Louisiana Derby. CDI racetracks have hosted six Breeders’ Cup World Thoroughbred Championships. CDI also owns off-track betting facilities and has interests in various television production, telecommunications and racing services companies that support CDI’s network of simulcasting and racing operations. CDI trades on the NASDAQ National Market under the symbol CHDN and can be found on the Internet at www.churchilldownsincorporated.com.

Magna Entertainment Corp. (“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 wagering operations, including off-track betting facilities. In 2005, MEC created PariMax Inc., a subsidiary that oversees its various electronic distribution platforms, including XpressBet(TM), a national Internet and telephone account wagering system, and Horse Racing TV(TM), a 24-hour horse racing television network, as well as RaceONTV(TM) and MagnaBet(TM) internationally.

Information set forth in this news release contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 provides certain "safe harbor" provisions for forward-looking statements. The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made. CDI and MEC assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "should," "will," and similar words, although some forward-looking statements are expressed differently. Although MEC and CDI believe that the expectations reflected in such forward-looking statements are reasonable, CDI and MEC can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include: the effect of global economic conditions; the effect (including possible increases in the cost of doing business) resulting from future war and terrorist activities or political uncertainties; the economic environment; the impact of increasing insurance costs; the impact of interest rate fluctuations; the effect of any change in our accounting policies or practices; the financial performance of our companies’ racing operations; the impact of gaming competition (including lotteries and riverboat, cruise ship and land-based casinos) and other sports and entertainment options in those markets in which our companies operate; the impact of live racing day competition with other racetracks in the jurisdictions in which our companies operate; costs associated with our companies’ efforts in support of alternative gaming initiatives; costs associated with Customer Relationship Management or other marketing initiatives; a substantial change in law or regulations affecting pari-mutuel and gaming activities; a substantial change in allocation of live racing days; our companies’ continued ability to effectively compete for the country’s top horses and trainers necessary to field high-quality horse racing; our companies’ continued ability to grow our share of the interstate simulcast market; our companies’ ability to execute acquisition strategies and to complete or successfully operate planned expansion projects; our companies’ ability to successfully complete any divestiture transaction; our companies’ ability to adequately integrate acquired businesses; market reaction to our companies’ expansion projects; any business disruption associated with facility renovations or construction at our companies’ operations; the loss of industry totalisator companies or their inability to provide our companies with assurance of the reliability of their internal control processes through Statement on Auditing Standards No. 70 audits or to keep their technology current; the need for various alternative gaming approvals in states where our companies operate; our companies’ accountability for environmental contamination; the loss of key personnel; the impact of natural disasters, including severe weather on our companies’ operations and the extent of our companies’ property and business interruption insurance coverage for any related losses; any business disruption associated with a natural disaster and/or its aftermath; and the volatility of our companies’ stock price.