UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K/A
(Amendment No. 1)

(Mark One)

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2006.ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from  to
.Commission File No. 000-30578


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MAGNA ENTERTAINMENT CORP.(Exact name of registrant as specified in its charter)

|Delaware(State or Other Jurisdiction of Incorporation or Organization) 337 Magna Drive
Aurora, Ontario, Canada(Address of Principal Executive Offices) |  | 98-0208374(I.R.S. Employer Identification No.) L4G 7K1(Zip Code)
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------

Registrant's
telephone number, including area code: (905) 726-2462
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Subordinate Voting Stock
(Title of class)

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o
No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
o No ý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer
and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one). Large accelerated filer o Accelerated Filer
ý Non-accelerated Filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes
o No ý



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As of June 30, 2006, the aggregate market value of the Class A Subordinate Voting Stock held by non-affiliates of the registrant was approximately
$203,163,912 (based on the closing sale price of $5.26 per share of Class A Subordinate Voting Stock reported on The Nasdaq National Market on June 30, 2006, the last day of the
registrant's most recently completed second quarter). As of June 30, 2006, non-affiliates held no shares of Class B Stock. There is no active market for such stock.

The
number of shares of Class A Subordinate Voting Stock of the registrant outstanding as of March 8, 2007 was 49,101,415.

The
number of shares of Class B Stock of the registrant outstanding as of March 8, 2007 was 58,466,056.

Documents Incorporated by Reference

Portions of the registrant's proxy statement (our "Proxy Statement") to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A within 120 days after the registrant's fiscal year end of December 31, 2006 are incorporated by reference in Part III of this Annual Report to the extent
stated herein. Except with respect to information specifically incorporated by reference in this Annual Report, the documents incorporated by reference are not deemed to be filed as
part hereof.

Explanatory Note

The Registrant is amending its Form 10-K, as originally filed on March 15, 2007, to replace pages 84 and 130 in order to
add the signature of the Registrant's independent auditors.

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REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Shareholders of Magna Entertainment Corp.

We
have audited the accompanying consolidated balance sheets of Magna Entertainment Corp. as of December 31, 2006 and 2005, the related consolidated statements of operations and
comprehensive loss, changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2006. Our audits also included the financial
statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Magna Entertainment Corp. at
December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2006, in
conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the information set forth therein.

The
accompanying financial statements have been prepared assuming that Magna Entertainment Corp. will continue as a going concern. As more fully described in Note 1, the Company
has incurred recurring operating losses and has a working capital deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in
regard to these matters also are described in Note 1. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this
uncertainty.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Magna Entertainment Corp.'s internal
control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission and our report, dated March 7, 2007, expressed an unqualified opinion thereon.

As
described in Note 3 to these consolidated financial statements, the Company changed its accounting policies in regards to the recognition and disclosure of their
employee defined benefit plans and the fair value recognition provisions of accounting for stock-based compensation.

|Toronto, Canada
March 7, 2007 |  | /s/ERNST & YOUNG LLPErnst & Young LLP
|----------------------------- |  | -------------------------------------

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors and Shareholders of Magna Entertainment Corp.

We
have audited management's assessment, included in the accompanying Management's Report on Internal Control over Financial Reporting, that Magna Entertainment Corp. maintained
effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO criteria"). Magna Entertainment Corp.'s management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management's assessment and an
opinion on the effectiveness of the Company's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, management's assessment that Magna Entertainment Corp. maintained effective internal control over financial reporting as at December 31, 2006, is fairly stated, in
all material respects, based on the COSO criteria. Also, in our opinion, Magna Entertainment Corp. maintained, in all material respects, effective internal control over financial reporting as at
December 31, 2006, based on the COSO criteria.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Magna Entertainment
Corp. as of December 31, 2006 and 2005, and the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity and cash flows for each of the three years
in the period ended December 31, 2006, and our report dated March 7, 2007 expressed an unqualified opinion thereon. Our audits also included the financial statement schedule listed in
the Index at Item 15(a).

|Toronto, Canada
March 7, 2007 |  | /s/ERNST & YOUNG LLPErnst & Young LLP
|----------------------------- |  | -------------------------------------

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on this 27th day of March, 2007.

| |  | MAGNA ENTERTAINMENT CORP.
| |  | -------------------------
| |  | By:                      

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

|Signature |  | Title                               |  | Date                                                                              
|--------- |  | ----------------------------------- |  | ----------------------------------------------------------------------------------
|By:       |  | /s/MICHAEL NEUMANMichael Neuman     |  | Chief Executive Officer and Director
(Principal Executive Officer)                
|By:       |  | /s/BLAKE TOHANABlake Tohana         |  | Executive Vice-President and Chief Financial Officer
(Principal Financial Officer)
|By:       |  | /s/MARY LYN SEYMOURMary Lyn Seymour |  | Vice-President and Controller
(Principal Accounting Officer)                      
|By:       |  | *Jerry D. Campbell                  |  | Director                                                                          
|By:       |  | *Joseph De Francis                  |  | Director                                                                          
|By:       |  | *Louis E. Lataif                    |  | Director                                                                          
|By:       |  | *William J. Menear                  |  | Director                                                                          
|By:       |  | *Dennis Mills                       |  | Director                                                                          
|By:       |  | *Frank Stronach                     |  | Chairman and
Director                                                             
|By:       |  | *Charlie J. Williams                |  | Director                                                                          

March 27,
2007.

| |  | By:    | /s/BLAKE S. TOHANA
| |  | ------ | ------------------
| |  | Name:  | Blake S. Tohana   
| |  | Title: | Attorney-in-Fact  

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EXHIBIT INDEX

|Exhibit No. |  | Description of Document                                                                                                                     
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|31.1        |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.*         
|31.2        |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.*         
|32.1        |  | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.*
|32.2        |  | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.*

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