Horse Racing--and More--at Magna
Can U.S. racetracks, where betting is in a downswing, reinvent themselves as entertainment centers? "That's the vision of Magna Entertainment," says Morton Cohen, who heads Cleveland hedge fund Clarion Management. Magna (MIEC ), in which Clarion has been accumulating shares, owns and operates Thoroughbred racing at Santa Anita Park near Los Angeles--in addition to tracks in Florida, Michigan, Pennsylvania, and other states. Cohen says Magna, which is controlled by Magna International, plans to install a variety of gambling devices at the racetracks, including slot machines, video games, lottery systems, and screens for live video streaming of races. California recently granted Magna licenses to let Californians set up accounts at Magna for betting on horse races from home. Cohen says Magna's properties alone are worth more than its stock price, currently at 9 a share. His target is 20 for the next 12 months. He figures Magna will earn 25 cents a share on sales of $500 million in 2002, and 35 cents on $600 million in 2003.
By Gene G. Marcial