<PAGE>


                  [LETTERHEAD OF MAGNA ENTERTAINMENT CORP.]


     EXHIBIT 10.17

     November 1, 2000

     PRIVATE & CONFIDENTIAL

     Mr. Gary Cohn
     337 Magna Drive
     Aurora, Ontario
     L4G 7K1

     Dear Gary:

     Re:  Employment with Magna Entertainment Corp.
     ----------------------------------------------

     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: You are appointed effective November 13, 2000 (or such
          earlier date as may be mutually agreed) as Vice President and
          Corporate Counsel 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 the Toronto area.

     2.   Base Salary: Your Base Salary shall be U.S. $200,000 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 0.5% of the pre-tax profits before
          profit-sharing 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 $100,000 and shall be inclusive
          of all entitlement to vacation pay, and less statutorily required
          deductions. Your Annual Bonus for the period ending December 31, 2000
          will be prorated for your length of service with the Corporation on
          calendar 2000.

     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;
<PAGE>

                                       2

          (b)  four 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; and

          (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 75,000 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, 25,000 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, terminate your
          employment and 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
<PAGE>

                                       3

          employment immediately by paying you a retiring allowance. Such
          retiring allowance shall be equal to your Base Salary and Annual Bonus
          for the one year preceding termination. 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 one year from
          the day of termination.

          On termination of this agreement other than for dismissal pursuant to
          sub-paragraph 7(d), (i) any stock options referenced in paragraph 5
          will immediately vest, and will continue to be exercisable in
          accordance with the aforesaid Stock Option Agreement, and (ii) the
          Corporation will pay your Annual Bonus on a prorated basis.

          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
          November 13, 2000, 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 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 January 31,
          2001.
<PAGE>

                                       4

     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 effect.

     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 November 10,
     2000, after which, if not so signed and returned, this agreement shall
     become null and void and of no effect. Effective November 13, 2000, 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                      Gary Cohn