MAGNA ENTERTAINMENT CORP.
    CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
  -------------------------------------------------------------------------
    (Unaudited)
    (U.S. dollars in thousands,
     except per share figures)
    -------------------------------------------------------------------------
                                                          Three months ended
                                                         March 31,  March 31,
                                                             2001       2000
    -------------------------------------------------------------------------                                                                  (restated
                                                                  see note 2)
    Revenue
    Racetrack
      Gross wagering                                      192,326    164,810
      Non-wagering                                         22,589     17,958
    Real estate
      Sale of real estate                                  26,151          -
      Rental and other                                      3,460      3,700
    -------------------------------------------------------------------------
                                                          244,526    186,468
    -------------------------------------------------------------------------
    Costs and expenses
    Racetrack
      Purses, awards and other                            122,232    105,726
      Operating costs                                      50,976     46,509
      General and administrative                            7,962      3,318
    Real estate
      Cost of real estate sold                             14,093          -
      Operating costs                                       2,688      2,971
      General and administrative                              245        239
    Predevelopment and other costs                          1,708      1,271
    Depreciation and amortization                           5,354      5,267
    Interest expense                                        2,197        738
    Interest income                                          (797)	(729)
    -------------------------------------------------------------------------
                                                          206,658    165,310
    -------------------------------------------------------------------------
    Income before income taxes                             37,868     21,158
    Income tax provision                                   15,400      9,178
    -------------------------------------------------------------------------
    Net income                                             22,468     11,980
    Other comprehensive loss:
      Foreign currency translation adjustment               8,854      4,850
    -------------------------------------------------------------------------
    Comprehensive income                                   13,614      7,130
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings per share of Class A Subordinate Voting
     Stock, Class B Stock or Exchangeable Share:
      Basic                                                $ 0.28     $ 0.15
      Diluted                                              $ 0.28     $ 0.15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of shares of Class A Subordinate
     Voting Stock, Class B Stock and Exchangeable
     Shares outstanding during the
     period (in thousands):
      Basic                                                80,472     80,289
      Diluted                                              80,472     80,289
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    MAGNA ENTERTAINMENT CORP.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
    (Unaudited)
    (U.S. dollars in thousands)
    -------------------------------------------------------------------------
                                                          Three months ended
                                                         March 31,  March 31,
                                                             2001       2000
    -------------------------------------------------------------------------
    Cash provided from (used for):
    OPERATING ACTIVITIES
    Net income                                             22,468     11,980
    Items not involving current cash flows                 (9,507)     4,998
    -------------------------------------------------------------------------
                                                           12,961     16,978
    Changes in non-cash items related to operations         8,714	(23,204)
    -------------------------------------------------------------------------
                                                           21,675	(6,226)
    -------------------------------------------------------------------------
    INVESTMENT ACTIVITIES
    Real estate property and fixed asset additions         (4,204)	(2,386)
    Proceeds on sale of real estate                         6,778          -
    Other asset (additions) disposals                        (125)       700
    -------------------------------------------------------------------------
                                                            2,449	(1,686)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Decrease in bank indebtedness                          (7,609)	(3,554)
    Increase of (repayment of) long-term debt               9,876	(3,910)
    Issue of Class A Subordinate Voting Stock                  40          -
    -------------------------------------------------------------------------
                                                            2,307	(7,464)
    -------------------------------------------------------------------------
    Effect of exchange rate changes on cash
     and cash equivalents                                    (878)	(69)
    -------------------------------------------------------------------------
    Net increase (decrease) in cash and cash
     equivalents during the period                         25,553	(15,445)
    Cash and cash equivalents,
     beginning of period                                   31,976     50,660
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period               57,529     35,215
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    MAGNA ENTERTAINMENT CORP.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------
    (Unaudited)
    (U.S. dollars in thousands)
    -------------------------------------------------------------------------
                                                        March 31,December 31,
                                                             2001       2000
    -------------------------------------------------------------------------
                                   ASSETS
    -------------------------------------------------------------------------
    Current assets:
      Cash and cash equivalents                            57,529     31,976
      Restricted cash                                      27,538     13,461
      Accounts receivable                                  62,030     33,399
      Prepaid expenses and other                            9,124      7,984
    -------------------------------------------------------------------------
                                                          156,221     86,820
    -------------------------------------------------------------------------
    Real estate properties and fixed assets, net          546,720    568,265
    -------------------------------------------------------------------------
    Other assets, net                                     115,962    117,561
    -------------------------------------------------------------------------
    Future tax assets                                       8,600      8,393
    -------------------------------------------------------------------------
                                                          827,503    781,039
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                    LIABILITIES AND SHAREHOLDERS' EQUITY
    -------------------------------------------------------------------------
    Current liabilities:
      Bank indebtedness                                         -     7,609
      Accounts payable and other liabilities               83,418    64,847
      Income taxes payable                                 16,434     1,111
      Long-term debt due within one year                   12,538    12,754
    -------------------------------------------------------------------------
                                                          112,390    86,321
    -------------------------------------------------------------------------
    Long-term debt                                         72,795    63,343
    -------------------------------------------------------------------------
    Other long-term liabilities                               257       234
    -------------------------------------------------------------------------
    Future tax liabilities                                 86,619    89,353
    -------------------------------------------------------------------------
    Shareholders' equity:
    Capital stock issued and outstanding -
      Class A Subordinated Voting Stock                   101,337   100,770
      Exchangeable Shares                                  57,410    57,937
      Class B Stock                                       394,094   394,094
    Contributed surplus                                     1,352     1,352
    Retained earnings (deficit)                            20,478    (1,990)
    Accumulated comprehensive loss                        (19,229)  (10,375)
    -------------------------------------------------------------------------
                                                          555,442   541,788
    -------------------------------------------------------------------------
                                                          827,503   781,039
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Notes:
    ------
    1. In the opinion of management, the unaudited interim consolidated
       financial statements reflect all adjustments, which consist only of
       normal and recurring adjustments, necessary to present fairly the
       financial position at March 31, 2001 and the results of operations and
       cash flows for the three month period ended March 31, 2001.
    2. Effective October 1, 2000, the Company changed its method of accounting 
       for revenue recognition in accordance with Staff Accounting
       Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements
       and guidance provided by EITF 99-19 Recording Revenue Gross as a
       Principal versus Net as an Agent. Previously the Company recorded its
       wagering revenue net of "purses, stakes and awards" and "pari-mutuel
       wagering taxes". Under the new accounting method adopted during the
       fourth quarter of 2000, the Company now recognizes revenue gross of
       "purses, stakes and awards" and "pari-mutuel wagering taxes". The
       costs relating to these amounts are shown as "Purses, awards and
       other" in the accompanying income statement. In accordance with SAB
       101 guidance, all prior period income statements have been
       retroactively reclassified to comply with the new accounting method.
    3. The following table presents the number of Class A Subordinate Voting
       Stock, Class B Stock and Exchangeable Shares outstanding at March 31,
       2001 (in thousands):
                   Class A Subordinate Voting Stock        14,272
                   Class B Stock                           58,466
                   Exchangeable Shares                      7,736
                                                           ------
                                                           80,474
                                                           ------
                                                           ------
    4. The Company's segmented results of operations are as follows
       (in thousands):
                      Three months ended March 31, 2001
                                         Racetrack    Real Estate
                                         Operations   Operations     Total
    -------------------------------------------------------------------------
    Revenue                               $214,915     $ 29,611     $244,526
    -------------------------------------------------------------------------
    Income before income taxes            $ 25,875     $ 11,993     $ 37,868
    -------------------------------------------------------------------------
    Real estate properties and fixed
     asset net additions (disposals)      $  1,820     $(11,709)    $(9,889)
    -------------------------------------------------------------------------

                      Three months ended March 31, 2000
                                         Racetrack    Real Estate
                                         Operations   Operations     Total
    -------------------------------------------------------------------------
    Revenue                               $182,768    $   3,700     $186,468
    -------------------------------------------------------------------------
    Income (loss) before income taxes     $ 21,499    $    (341)    $ 21,158
    -------------------------------------------------------------------------
    Real estate properties and fixed
     asset net additions                  $  1,564    $     822     $  2,386
    -------------------------------------------------------------------------
    5. On April 5, 2001 the Company completed the previously announced
       agreement with Ladbroke Racing Corp. and one of its subsidiaries
       (collectively "LRC") to acquire LRC's account wagering operations,
       The Meadows harness track, four off-track betting facilities and an 18.3%
       interest in The Racing Network. In accordance with the terms of the
       agreement, one-half of the $53 million purchase price was paid in
       cash, one-quarter was satisfied by the issuance of 3,178,297 shares
       of Class A Subordinate Voting Stock of the Company and one-quarter was
       satisfied through the issuance of a promissory note which is payable
       in two equal installments on the first and second anniversaries of
       closing, and bears interest at 6% per annum.