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[LETTERHEAD OF MAGNA ENTERTAINMENT CORP.]



Exhibit 10.16

October 5, 2000

PRIVATE & CONFIDENTIAL

Mr. Graham Orr
337 Magna Drive
Aurora, Ontario
L4G 7K1

Dear Graham:

Re:  Employment with Magna Entertainment Corp.
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In accordance with our recent discussions, we are delighted to confirm the terms
and conditions of your employment with Magna Entertainment Corp.  (the
"Corporation"), as follows:

1.   Position: Subject to approval by the Board of Directors of the Corporation,
     you are appointed effective January 1, 2001 (or such earlier date as may be
     mutually agreed) as Executive Vice President and Chief Financial Officer of
     the Corporation reporting to the President and Chief Executive Officer and
     the Board and carrying out your day-to-day duties from agreed offices in
     Toronto and Los Angeles.

2.   Base Salary:  Your Base Salary shall be U.S. $350,000 per annum (less
     statutorily required deductions), payable monthly in arrears and otherwise
     in accordance with the Corporation's standard payroll practices.

3.   Annual Bonus:  In addition to your Base Salary, you shall receive (a) a
     bonus (the "Basic Bonus") equal to 2% of the pre-tax profits of the
     Corporation at the end of each year of employment, and (b) a discretionary
     bonus (the "Discretionary Bonus") as determined by the Board (the Basic
     Bonus and the Discretionary Bonus are referred to herein collectively as
     the "Annual Bonus").  The Annual Bonus shall not be less than US  $350,000
     and shall be inclusive of all entitlement to vacation pay, and less
     statutorily required deductions.

4.   Benefits:  During your employment by the Corporation, you will be entitled
     to:

     (a)  participate in all group insurance and benefit programs generally
          applicable to salaried employees of the Corporation from time to time,
          with the exception of any pension plan or Employee Equity
          Participation and Profit Sharing Plan or any equivalent or related
          plans in effect from time to time;
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     (b)  five weeks vacation in respect of each completed twelve month period,
          to be taken at such time or times as are mutually convenient to you
          and the Corporation, but not payment in lieu thereof;

     (c)  receive an automobile allowance of U.S. $800 per month; provided that
          you shall be responsible for all automobile operating costs including,
          without limitation, fuel, repairs, maintenance, insurance premiums and
          insurance deductibles;

     (d)  reimbursement for all reasonable and documented business expenses
          incurred on behalf of the Corporation in carrying out your duties, in
          accordance with the Corporation's policies from time to time, but
          excluding automobile operating costs;

5.   MEC Stock Options: Subject to the express approval of the Board of
     Directors of the Corporation and any regulatory bodies having jurisdiction
     (including the consent of The Toronto Stock Exchange and NASDAQ to the
     listing of the underlying shares), and subject to you entering into a Stock
     Option Agreement with the Corporation in the standard form contemplated by
     the Corporation's Long-Term Incentive Plan, the Corporation shall grant you
     options (vesting over three years) to purchase 300,000 Class A Subordinate
     Voting Shares of the Corporation ("Shares") at an exercise price per share
     which is equal to the closing price on NASDAQ on the day prior to grant by
     the Board of Directors of the Corporation. Such options shall be
     exercisable by you only in accordance with the terms and conditions set
     forth in the Stock Option Agreement referred to above. Upon receipt of an
     executed copy of this agreement, we will place this matter before the Board
     of Directors of the Corporation at the earliest opportunity. Each year the
     Board will consider the grant of additional options for executive
     management based on a program to be established by the Compensation
     Committee and approved by the Board of Directors of the Corporation.

6.   Stock Ownership: The Corporation requires that you accumulate and maintain
     an investment in Class A Subordinate Voting Shares of the Corporation
     ("Shares") as a condition of your employment. As a minimum, you agree to
     purchase within 90 days of commencement of employment, 50,000 Shares of the
     Corporation. You shall retain such Shares for the term of this Agreement,
     provided however that you may sell up to one quarter of such Shares
     following each completed year of employment.

     Evidence of your ownership of the required number of Shares must be
     produced each year commencing in February, 2001, in order to obtain payment
     of the cash portion of your Annual Bonus in each such year.

7.   Termination:  Your employment and this agreement, including all benefits
     provided for under this agreement, will terminate on:  (a) the acceptance
     by the Corporation of your voluntary resignation; (b) at the Corporation's
     option, your disability for an aggregate of six months or more in any
     twenty-four month period, subject to any statutory requirement to
     accommodate such disability; (c) your death; or (d) your dismissal for just
     cause or by reason of your breach of the terms of this agreement.

     Otherwise, you or the Corporation may, at any time in the first three years
     of this agreement, terminate your employment and this agreement by
     providing the other party with twenty-four (24) months prior written notice
     of intention to terminate and, at any time
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     in any year after the third year of this agreement, by providing the other
     party with twelve (12) months prior written notice of intention to
     terminate. In addition the Corporation may elect to terminate your
     employment immediately by paying you a retiring allowance. Such retiring
     allowance shall be equal to your salary and Annual Bonus for the two years
     preceding termination, in the case of termination in the first three years
     of this agreement, and equal to your salary and Annual Bonus for the one
     year preceding termination, in the case of termination after the third year
     of this agreement. Any such aforesaid payment of a retiring allowance will
     be made in a lump sum within thirty days of the day of termination. If your
     employment is terminated pursuant to this paragraph, the Corporation shall
     maintain on your behalf the benefits referred to in paragraph 4(a) for a
     period of two years, in the case of termination in the first three years of
     this agreement, and thereafter one year from the day of termination.

     On termination of this agreement other than for dismissal pursuant to sub-
     paragraph 7(d), any stock options referenced in paragraph 5 will
     immediately vest, and will continue to be exercisable in accordance with
     the aforesaid Stock Option Agreement.

     The termination provisions set forth above represent all severance pay
     entitlement, notice of termination or pay in lieu thereof, salary, bonuses,
     automobile allowances, vacation and/or vacation pay and other remuneration
     and benefits payable or otherwise provided to you in relation to your
     employment by the Corporation or any affiliates of Magna International Inc.
     (the "Magna Group").

8.   Other Conditions:  You hereby acknowledge as reasonable and agree that you
     shall abide by the following terms and conditions:

     a)   Technology, Know-How, Inventions, Patents: That all designs, devices,
          improvements, inventions and ideas made or conceived by you resulting
          from your access to the business of the Corporation and/or the Magna
          Group shall be exclusive property of the Magna Group, and you and your
          estate agree to take all necessary steps to ensure that such property
          rights are protected.

     b)   Confidentiality: You shall keep confidential at any time during or
          after your employment, any information (including proprietary or
          confidential information) about the business and affairs of, or
          belonging to, the Corporation or any member of the Magna Group or
          their respective customers or suppliers, including information which,
          though technically not trade secrets, the dissemination or knowledge
          whereof might prove prejudicial to any of them.

     c)   Non-Competition: During the term of your employment with the
          Corporation and for a period of twelve months after the termination of
          your employment, you shall not, directly or indirectly, in any
          capacity compete with the business of the Corporation or of any member
          of the Magna Group in respect of which you have had access to
          proprietary or confidential information or solicit the employees
          thereof whether for employment or otherwise.

9.   Term:  Subject to earlier termination in accordance with the terms of this
     agreement, your employment with the Corporation shall commence on January
     1, 2001, or such earlier or later date as may be mutually agreed upon (the
     "Start Date"), and shall expire on December 31, 2005.  Upon expiry or other
     termination of this agreement, paragraph 8
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     shall continue in full force and effect. This agreement shall be null and
     void and of no effect if you do not commence employment by August 15, 2000
     or if you are unable to obtain the appropriate US immigration visa
     permitting you to work for the Corporation for the term of this agreement.

10.  Assignability:  The Corporation may, in its sole discretion, assign this
     agreement to an affiliated or other organization at any time.  Upon any
     such assignment, the terms and conditions of this agreement shall continue
     in full force and affect.

If the terms of employment as set out in this agreement are acceptable to you,
please sign and date three copies in the places indicated and return two fully
signed copies to the attention of the Chairman by October 10, 2000, after which,
if not so signed and returned, this agreement shall become null and void and of
no effect.  Upon execution by you, this agreement (i) replaces any prior written
or oral employment contract or other agreement concerning remuneration between
you and the Corporation or any member of the Magna Group, (ii) will continue to
apply to your employment in a similar or other capacity with the Corporation or
any member of the Magna Group, and (iii) will continue to be applicable in the
event that your employment with the Corporation continues beyond the expiry date
of the term specified above without this agreement being formally extended or
replaced.

Yours very truly,

MAGNA ENTERTAINMENT CORP.



____________________
Frank Stronach
Chairman
                              -------------------

I hereby accept the terms and conditions set out above and acknowledge that this
agreement contains all the terms and conditions of my employment with Magna
Entertainment Corp. and that no other terms, conditions or representations other
than those within this letter form part of this agreement.



_____________________________                       ____________________________
Date                   , 2000                       Graham Orr