<PAGE>

                                                                   EXHIBIT 10.28
                                                                   -------------

               CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT

     This CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made as of December 12, 1996 between Penske Motorsports, Inc., a Delaware
corporation (the "Company") and Kaiser Ventures Inc., a Delaware corporation
("Kaiser").

                                    Recitals

     A.   Kaiser is currently the owner of 1,373,625 shares of the common stock
of the Company, $.0l par value share, and will acquire an additional 254,298
shares of the Company's common stock upon the consummation of a proposed real
estate transaction (collectively the "SHARES"), as set forth in a Purchase
Agreement and Escrow among the Company, Kaiser and The California Speedway
Corporation ("TCSC").

     B.   The Company, Kaiser and PSH Corp., a Delaware corporation ("Penske"),
are parties to a Shareholders Agreement, dated November 22, 1995, as amended
pursuant to a First Amendment to Shareholders Agreement, dated March 21, 1996
(the "Shareholders Agreement").

     C.   In order to accommodate those person or entities that may accept the
pledge of all or any portion of the Shares as collateral for a loan, bond,
financial assurance or other similar obligation, Kaiser desires to obtain, and
the Company is willing to grant, certain registration rights for the Shares in
the event a holder of a security interest in the Shares should foreclose on the
Shares and then be required to sell all or any portion of such Shares to satisfy
all or a portion of Kaiser's indebtedness to such lender.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and Kaiser agree as
follows:

     1.   Confirmation of Ability to Pledge the Shares.  The Company hereby
agrees that Kaiser shall have the right to pledge all or any part of the shares
to a third party as collateral for a loan, bond, financial assurance or other
similar borrowing, potential borrowing, or obligation (hereafter a "Secured
Lender" and collectively "Secured Lenders")) subject to the terms and conditions
of this Agreement, the Shareholders Agreement, the Lock-up Agreement between
Kaiser and CS First Boston dated March 21, 1996, and any restrictions imposed by
applicable law.

     2.   Demand Registration Rights.

          (a) Subject to the terms and conditions of this Agreement, upon
written demand to the Company by a Secured Lender who is the beneficial owner of
a majority of the Registrable Securities (as defined below) pledged to Secured
Lenders (a "Majority Holder"), the Company shall undertake all reasonable
efforts to effect the registration of all or any portion of the Registrable
Securities (as defined below) owned by the Secured Lenders under the Securities
Act of 1933, as amended (the "Securities Act") and pursuant to applicable state
"blue sky" laws ("Demand Registration").  The term "Registrable Securities"
means those shares beneficially owned by a Secured Lender and acquired from
Kaiser through foreclosure or through a transfer in lieu of foreclosure, and as
a result of a default by Kaiser under the terms

                                       1
<PAGE>

               CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT


of any security or pledge agreement which grants to such Secured Lender a
security interest in, or pledge of, all or any part of the Shares together with
all the Shares deemed Registrable Securities pursuant to Section 2(b) below. The
terms "beneficial owner" or "beneficial ownership" as used in this Agreement
shall mean ownership in accordance with Rule 13d-3 promulgated pursuant to the
Securities Exchange Act of 1934, as amended.

        (b) Each request for a Demand Registration shall specify the approximate
number of Registrable Securities requested to be registered.  Within ten (10)
days after receipt of any such request, the Company will give written notice of
such requested registration to all Secured Lenders known to the Company and will
include in such registration all Shares with respect to which the Company has
received written requests for inclusion therein within fifteen (15) days after
the receipt of Company's notice.  All of such Shares shall thereafter be deemed
Registrable Securities for purposes of this Agreement.

        (c) The holders of Registrable Securities are entitled to request two
Demand Registrations, an initial Demand Registration and a second Demand
Registration pursuant to Paragraph 3(c) below.  The Secured Lenders will pay all
Registration Expenses (as defined in Paragraph 6 below) pro-rata on the basis of
the amount of securities being sold by each such holder participating in the
Demand Registration.  No party has any rights under this Agreement to request
Demand Registrations except as provided in this Agreement.  A registration will
not count as a permitted Demand Registration until it has become effective,
(unless such Demand Registration has not become effective due solely to the
fault of the holders requesting such registration).  The Demand Registrations
shall be underwritten registrations.

        (d) Subject to the restrictions below, the Company may include in the
Demand Registration any securities which are not Registrable Securities.  If a
Demand Registration is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Registrable
Securities and the additional securities requested to be included in such
offering, if any, exceeds the number of securities that can be reasonably sold
in such offering without adversely affecting the marketability of the offering,
the Company will include in such registration, prior to the inclusion of any
additional securities which are not Registrable Securities, the number of
Registrable Securities requested to be included that in the opinion of such
underwriters can be sold without adversely affecting the marketability of the
offering.  In such event, the amount of Registrable Securities to be registered
shall be first allocated to all those Shares requested by a Majority Holder with
the balance of the Registrable Securities to be included in the Demand
Registration allocated pro-rata among the other respective holders of such
Registrable Securities on the basis of the amount of Registrable Securities,
excluding the Majority Holder, owned by each other holder; but in no event shall
the number of shares registered in the initial Demand Registration be less than
850,000 Shares of Registrable Securities unless agreed upon in writing by the
Company and the Secured Lenders.

        (e) The Company will not be obligated to effect any Demand Registration
within nine (9) months after the effective date of a previous registration
statement filed by the Company under the Securities Act of 1933.  The Company
may postpone for up to three (3) months the filing or the effectiveness of a
registration statement for the Demand Registration if the Company in its
reasonable good faith judgment, determines that such Demand

                                       2
<PAGE>

               CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT


Registration would reasonably be expected to have an adverse effect on any then
existing proposal or plan by the Company or of its Subsidiaries to engage in any
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer, issuance and selling of additional stock
whether through a public offering or otherwise, or any similar transaction;
provided that in such event, the holders of Registrable Securities initially
requesting such Demand Registration will be entitled to withdraw such request
and, if such request is withdrawn, such Demand Registration will not count as a
Demand Registration under this Agreement. Notwithstanding the foregoing, in the
event the Company has filed or intends to file a registration statement within
three (3) months and such filing or intent to file precludes the Secured Lenders
from registering their Registrable Securities such Secured Lenders shall have
"piggyback" registration rights in accordance with, and subject to the terms and
conditions of the Registration Rights Agreement, dated as of March 21, 1996, by
and between the Company and Kaiser (the "Registration Rights Agreement"), as if
such Registrable Securities are "Shares" thereunder.

     3.   Conditions of Obligation to Register Shares.  The obligation of the
Company under this Agreement to register any of the Shares owned by a Secured
Lender are subject to each of the following conditions:

          (a) The amount of Registrable Securities being registered on behalf of
the Majority Holder must be beneficially owned by the Majority Holder.  Any
Secured Lender other than the Majority Holder need not be the owner of Shares to
participate in a Demand Registration, but in no event shall Kaiser or an
affiliate of Kaiser be deemed a Secured Lender hereunder.

          (b) Prior to the commencement of the registration of the Registrable
Securities, the Secured Lender shall have first offered the Registrable
Securities to the Company, in accordance with the procedures and on the terms
and conditions set forth in Section 1.3 of the Shareholders Agreement.  If the
Company elects not to purchase the Registrable Securities, then the Secured
Lenders shall offer the Registrable Securities to PSH Corp., in accordance with
the procedures and on the terms and conditions set forth in Section 1.3 of the
Shareholders Agreement except that PSH Corp. shall have ten (10) days in which
to exercise its option purchase shares.  If PSH Corp., elects not to purchase
the Registrable Securities, then the Secured Lenders shall offer the Registrable
Securities to Penske Performance, Inc. in accordance with the procedures and on
the terms and conditions set forth in Section 1.3 of the Shareholders Agreement,
except that Penske Performance, Inc. shall have ten (10) days in which to
exercise its option to purchase such shares.  If Penske Performance, Inc.,
elects not to purchase the Registrable Securities, then the Secured Lenders
shall offer the Registrable Securities to International Speedway Corporation in
accordance with the procedures and on the terms and conditions set forth in
Section 1.3 of the Shareholders Agreement, except that International Speedway
shall have ten (10) days in which to exercise its option to purchase such
Registrable Securities.  If International Speedway Corporation elects not to
purchase the Registrable Securities then the Secured Lenders may exercise the
Demand Registration rights hereunder.

          (c) The Company shall not be required to include in any Registration
statement more than 850,000 Shares of the Registrable Securities on behalf of
the Secured Lenders.  However, after a twelve (12) month period after the
effective date of the initial

                                       3
<PAGE>

               CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT


registration statement, the Secured Lenders may by written demand to the Company
require the registration of the balance of the Registrable Securities not
previously registered.

          (d) During such time as Secured Lender may be engaged in a
distribution of the Shares that are registered, such holder will comply with
Rules 10b-7 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and pursuant thereto, Secured Lender will, among other
things, cause to be furnished to each broker through whom Registration
Securities may be offered, or to the offeree if an offer is not made through a
broker, such copies of the prospectus covering the Shares that are registered
and any amendment or supplement thereto and documents incorporated by reference
therein as may be required by law and the Secured Party shall not bid for or
purchase any shares of the Company or attempt to induce any other person to
purchase any securities of the Company other than as permitted under Exchange
Act.

          (e) To the extent not inconsistent with applicable law, each Secured
Lender will agree not to effect any public sale or distribution (including sales
pursuant to Rule 144) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities during the
seven (7) days prior to, and the 180-day period beginning on the effective date
of the underwritten Demand Registration, unless the underwriter managing the
registered public offering otherwise agrees.

          (f) Each Secured Lender participating in a Demand Registration shall
furnish to the Company a written undertaking that such Secured Lender is bound
by and will abide by the terms of this Agreement.

     4.   Secured Lender's Cooperation.  The Secured Lender will cooperate with
the Company in connection with the preparation of the registration statement,
and for so long as the Company is obligated to file and keep effective the
registration statement, will provide to the Company, in writing, for use in the
registration statement, all information regarding Secured Party as may be
necessary to enable the Company to prepare the registration statement and
prospectus covering the Registrable Securities, to maintain the currency and the
currency and effectiveness thereof and otherwise to comply with all applicable
requirements of law in connection therewith.

     5.   Exercise of Piggyback Registration Rights.  In the event a Secured
Lender makes a written demand for registration pursuant to the terms of this
Agreement, Kaiser shall not have any "piggyback" registration rights pursuant to
the Registration Rights Agreement for such registration statement.  However,
Kaiser's inability to participate in a registration shall not otherwise affect
its "piggyback" registration rights under the Registration Rights Agreement nor
shall it count as an offering in which Kaiser declined to participate.

     6.   Registration Expenses.

          (a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters and other Persons retained by the

                                       4
<PAGE>

               CONDITIONAL DEMAND REGISTRATION RIGHTS ACGREEMENT


Company (all such expenses being herein called "Registration Expenses"), will be
borne by Secured Lenders unless such registration shall be deemed an exercise of
Kaiser's "piggyback" pro-rata on the basis of the amount of the securities being
sold by each such holder, registration rights under the Registration Rights
Agreement in which case the allocation of Registration Expenses provided in the
Registration Rights Agreement shall be applicable.

          (b) Notwithstanding Paragraph 6(a) above, if the Company should also
register securities pursuant to the same registration statement as for all or
any portion of the Shares being registered on behalf of a Secured Lender,  the
Registration Expenses shall be allocated and paid pro rata among all such
persons, including the Company, on the amount of securities being sold by each
such person.

     7.   Indemnification.

          (a) The Company agrees to indemnify, to the extent permitted by law,
the Secured Lenders, their respective officers, directors, counsel and each
Person who controls Secured Lenders (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by Kaiser or the Secured Lenders
for use therein or by Kaiser's or the Secured Lenders failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished the Secured Lenders with a sufficient
number of copies of the same.

          (b) In connection with any registration statement in which Secured
Lenders are participating, the Secured Lenders and Kaiser will furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law each of the Secured Lenders and
Kaiser, will indemnify the Company, its directors, officers, counsel,
accountants and each Person who controls the Company (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact contained
in the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in writing by
any of the Secured Lenders or Kaiser.  No Secured Party or Kaiser shall be
responsible for the information furnished by the other.

          (c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party.  If such defense is assumed, the
indemnifying

                                       5
<PAGE>

               CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT


party will not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.

          (d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities.

     8.   Termination.  This Agreement shall automatically terminate and be of
no further force or effect upon the twentieth (20th) anniversary date of this
Agreement.

     9.   Third Party Beneficiary.  Kaiser and the Company agree that any
Secured Lender (as defined herein) shall have the right to enforce the terms and
conditions of this Agreement as if they were originally a party to this
Agreement.  This Agreement is for the benefit of each Secured Lender.

     10.  Miscellaneous.

          (a) Definition of Person.  "Person" means any individual, corporation,
              --------------------
partnership, limited liability company, limited liability partnership, firm,
joint venture, association, joint-stock company, trust or un-incorporated
organization.

          (b) Amendments and Waivers.  Except as otherwise provided herein, the
              ----------------------
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and Kaiser and any Secured Lender.

          (c) Severability.  Whenever possible, each provision of this Agreement
              ------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.

          (d) Counterparts.  This Agreement may be executed simultaneously in
              ------------
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.

          (e) Descriptive Headings.  The descriptive headings of this Agreement
              --------------------
are inserted for convenience only and do not constitute a part of this
Agreement.

          (f) Governing Law.  The corporate law of Delaware will govern all
              -------------
issues concerning the relative rights of the Company and its stockholders.  All
other questions concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto will be governed by the internal
law, and not the law of conflicts, of Michigan.

                                       6
<PAGE>

               CONDITIONAL DEMAND REGISTRATION RIGHTS AGREEMENT


          (g) Notices.  All notices, demands or other communications to be given
              -------
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid.  Such notices, demand and other
communications will be sent to the addresses indicated below:

       To:                    Penske Motorsports, Inc.
                              13400 Outer Drive West
                              Detroit, Michigan  48239
                              Attention:  President

       With a copy to:        Robert H. Kurnick, Jr.
                              c/o Penske Auto Centers, Inc.
                              3270 W. Big Beaver Road, Suite 130
                              Troy, Michigan  48084

       To:                    Kaiser Ventures Inc.
                              3633 E. Inland Empire Boulevard, Suite 850
                              Ontario, California  91764
                              Attention:  President

       With a copy to:        Terry Cook
                              c/o Kaiser Ventures Inc.
                              3633 E. Inland Empire Boulevard, Suite 850
                              Ontario, California  91764

     or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                "Company"
                                PENSKE MOTORSPORTS, INC.


                                By:  /s/ Richard J. Peters
                                   -----------------------
                                   Richard J. Peters, President &
                                   Chief Executive Officer


                                "Kaiser"
                                KAISER VENTURES INC.


                                By:  /s/ Gerald A. Fawcett
                                   -----------------------
                                   Gerald A. Fawcett, President &
                                   Chief Operating Officer

                                       7