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        Exhibit 10.3

GUARANTEE

GUARANTEE AGREEMENT made the 18th day of October, 2002 by FLAMBORO DOWNS
HOLDINGS LIMITED, a corporation incorporated under the laws of the Province of
Ontario (the "Guarantor") to and in favour of CHARLES JURAVINSKI and MARGARET
JURAVINSKI, on joint account, with right of survivorship, of the City of
Hamilton, in the Province of Ontario (collectively, the "Creditor").

RECITALS:

A.Pursuant to a share purchase agreement made as of February 5, 2002 among the
Creditor, the Guarantor, Flamboro Downs Limited and 1180554 Ontario Limited
("1180554") (the "Original Share Purchase Agreement"), the Creditor agreed to
sell, assign and transfer to 1180554 and 1180554 agreed to purchase the
Purchased Shares and the Business of the Acquired Companies and the property and
assets owned or leased by the Acquired Companies, all as more particularly
defined and set forth in the Original Share Purchase Agreement;

B.The Original Share Purchase Agreement was amended by an amending agreement
among the parties dated March 15, 2002 (the "First Amending Agreement"), an
amending agreement among the parties dated March 28, 2002 (the "Second Amending
Agreement"), and a waiver, acknowledgment and amending agreement among the
parties made as of May 3, 2002 (the "Third Amending Agreement");

C.The Original Share Purchase Agreement was further amended by an
acknowledgement and amending agreement made as of June 4, 2002 among the parties
to the Original Share Purchase Agreement and Ontario Racing Inc. (the
"Purchaser") and Magna Entertainment Corp. (the "Fourth Amending Agreement"),
and a letter amending agreement dated October 9, 2002 (the "Fifth Amending
Agreement"), (the Original Share Purchase Agreement, as so amended by the First
Amending Agreement, the Second Amending Agreement, the Third Amending Agreement,
the Fourth Amending Agreement, and the Fifth Amending Agreement is hereinafter
referred to as the "Share Purchase Agreement");

D.Capitalized terms used but not defined herein shall have the respective
meanings ascribed to them in the Share Purchase Agreement.

E.Pursuant to the Share Purchase Agreement, a portion of the Purchase Price for
the Purchased Shares was satisfied on Closing by delivery by the Purchaser to
the Creditor of a promissory note dated the 18th day of October, 2002 (the
"Promissory Note");

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F.Pursuant to the Share Purchase Agreement and the Promissory Note, the
Guarantor is required to unconditionally guarantee the due and punctual payment
and performance of all debts and liabilities, present or future, direct or
indirect, absolute or contingent, matured or not, at any time owing by the
Purchaser to the Creditor arising out of or relating to the Promissory Note;

G.Accordingly, the Guarantor enters into this Guarantee Agreement for the
purpose of unconditionally guaranteeing the due and punctual payment and
performance of the obligations of the Purchaser to and in favour of the
Creditor;

NOW THEREFORE IN CONSIDERATION of the sum of TEN DOLLARS ($10.00) and other good
and valuable consideration as set out in the Share Purchase Agreement, the
receipt and sufficiency of which are acknowledged, the Guarantor agrees with the
Creditor as follows:

1.     Guaranteed Obligations

The Guarantor irrevocably and unconditionally guarantees the due and punctual
payment and performance of all debts and liabilities, present or future, direct
or indirect, absolute or contingent, matured or not, at any time owing by the
Purchaser to the Creditor arising out of or relating to the Promissory Note, as
amended, modified, supplemented, restated or replaced from time to time,
including all reasonable legal and other costs, charges and expenses payable
thereunder (collectively, the "Guaranteed Obligations"); and if the Purchaser
shall at any time fail to fully and faithfully perform and discharge the
Guaranteed Obligations, the Guarantor shall itself perform and discharge the
Guaranteed Obligations. The foregoing covenant and obligation of the Guarantor
is absolute, present and continuing and is in no way conditional or contingent
on any event, circumstance, action or omission which might in any way discharge
a guarantor or surety.

2.     Right to Immediate Payment

The Creditor shall not be bound to seek or exhaust its recourse against the
Purchaser or any other persons or to realize on any security it may hold in
respect of the Guaranteed Obligations before being entitled to payment from the
Guarantor under this Agreement and the Guarantor renounces all benefits of
discussion and division.

3.     Payment on Demand

The liability of the Guarantor shall be payable immediately upon written demand
showing evidence that the Purchaser is in default under the Promissory Note and
such demand shall be conclusively deemed to have been effectually made and given
when an envelope containing such demand, addressed to the Guarantor at the
address of the Guarantor set out below, or at such other address as the
Guarantor may from time to time designate to the Creditor in writing, is posted
by registered mail, postage prepaid, or delivered to the Guarantor.

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        Address of Guarantor:

        337 Magna Drive

        Aurora, Ont.

        L4G 7K2

        Attention: General Counsel and Chief Executive Officer

4.     Statement of Accounts

Any account settled or stated by or between the Creditor and the Purchaser, or
if any such account has not been so stated or settled prior to any demand for
payment, any account stated by the Creditor shall, in the absence of manifest
error, be accepted by the Guarantor as conclusive evidence that the amount of
the Guaranteed Obligations so settled or stated is due and payable by the
Purchaser to the Creditor.

5.     Liability Absolute

The liability of the Guarantor shall be absolute and unconditional irrespective
of:

(a)the invalidity, unenforceability or illegality, in whole or in part, of any
agreements, instruments or other documents held by the Creditor to create,
represent or evidence any Guaranteed Obligations;

(b)any defence, counterclaim or right of set-off available to the Purchaser,
save and except for such right or rights of set-off available to the Purchaser
as specifically provided for in the Promissory Note;

(c)any change in the name, objects, capital, constating documents or by-laws of
the Purchaser;

(d)any amalgamation, merger or re-organization of the Purchaser or, if a
partnership, of the partnership, including, without limitation, by reason of the
death, retirement or admission for membership of any partners (in which case
this Agreement shall apply to the corporation or partnership, as the case may
be, resulting or continuing therefrom); or

(e)any other circumstance which might otherwise constitute, in whole or in part,
a defence available to, or a discharge of, the Guarantor, the Purchaser or any
other persons, firms or corporations in respect of the Guaranteed Obligations or
the liability of the Guarantor.

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6.     Continuing Nature and Reinstatement

This Agreement is a continuing guarantee and shall apply to and secure payment
of all Guaranteed Obligations and any ultimate unpaid balance thereof. This
Agreement shall be reinstated if at any time any payment of any Guaranteed
Obligation is rescinded or must otherwise be returned by the Creditor upon the
insolvency, bankruptcy or reorganization of the Purchaser or for any other
reason whatsoever, all as though such payment had not been made.

7.     Liquidation, Bankruptcy, etc.

In the event of any liquidation, winding up or bankruptcy of the Purchaser
(whether voluntary or compulsory) or in the event that the Purchaser shall make
a bulk sale of any of its assets within the bulk transfer provisions of any
applicable legislation or any composition with creditors or scheme of
arrangement, the Creditor shall have the right to rank in priority to the
Guarantor for its claim in respect of the Guaranteed Obligations and to receive
all dividends or other payments in respect thereof until its claim has been paid
in full, all without prejudice to its claim against the Guarantor who shall
continue to be liable for any remaining unpaid balance of the Guaranteed
Obligations. In the event of any valuation or retention by the Creditor of any
securities, such valuation or retention shall not, as between the Creditor and
the Guarantor, be considered payment, satisfaction or reduction of any
Guaranteed Obligations.

8.     Waiver of Subrogation Rights

In the event that the Creditor receives any payments on account of the liability
of the Guarantor, the Guarantor shall not have, and waives to the extent
required, all rights to claim repayment from or against the Purchaser and any
other guarantors and all rights to be subrogated to any rights of the Creditor,
until the Guaranteed Obligations have been paid in full.

9.     Entire Agreement

There are no representations, conditions, agreements or understandings with
respect to this Agreement or affecting the liability of the Guarantor other than
as set out or referred to in this Agreement, the Share Purchase Agreement, the
Promissory Note and the collateral documents contained or described within the
Promissory Note.

10.   Additional Security

This Agreement is in addition and without prejudice to any security of any kind
(including, without limitation, any guarantees, whether or not in the same form
as this Agreement) held by the Creditor.

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11.   Further Assurances

The Guarantor shall from time to time upon the reasonable request of the
Creditor, execute and deliver, under seal or otherwise, all such further
agreements, instruments and documents and do all such further acts and things as
the Creditor may reasonably require and as may be reasonably necessary to give
effect to the transaction contemplated by this Agreement.

12.   Successors, Assigns and Governing Law

This Agreement shall enure to the benefit of and be binding upon the respective
heirs, legal representatives, successors and assigns of the Guarantor and the
Creditor and shall be governed by and construed in accordance with the laws of
the Province of Ontario. The Guarantor irrevocably submits to the jurisdiction
of the courts of Ontario in any action or proceeding arising out of or relating
to this Agreement but nothing shall prevent the Creditor from enforcing this
Agreement or any related judgment against the Guarantor in any other
jurisdiction.

        SIGNED, SEALED AND DELIVERED at Toronto, Ontario, this 18th day of
October, 2002.

    FLAMBORO DOWNS HOLDINGS LIMITED
 
 
Per:
 

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Name: Andrew Gaughan
Title: President         I have authority to bind the Corporation.

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