However, owners Arena Leisure, said the course would be profitable following above expected attendance and approval to build a hotel on the site.

The Town Moor venue closed in 2006 while a new £32 million grandstand was built.

It reopened last August in time for September's St Leger - the world's oldest classic.

Arena has released its financial results for the year ending December 2007 which reveal the course lost £500,000 compared to a deficit of £100,000 in 2006.

One-off costs incurred because the new grandstand was completed shortly before the first race meeting and the cost of establishing a new business have been blamed for the loss.

Work to correct minor faults was still being undertaken by builders and the total cost of the redevelopment remained £34.9 million.

Mark Elliott, chief executive of Arena, said 102,000 spectators attended the nine race meetings held last year and predicted that 250,000 would attend fixtures in 2008.

Mr Elliott said: "Doncaster Racecourse is one of the UK's major racecourses hosting the last classic race of the season - the 230-year-old St Leger.

"It hosted the four day St Leger festival in mid-September as scheduled.
"Attendances across the four days exceeded expectations, with a modern day record of 31,000 attending the St Leger, which bodes well for the future.

"The performance since its reopening gives reassurance that it will operate in line with expectations and generate an increasing level of operating profit."

Arena, owns six other racecourses in the country including Wolverhampton, Windsor and Southwell.

It recorded a 28 per cent increase in revenue of £57.9 million across its business, mainly because of the reopening of Doncaster racecourse.

Pre-tax profits rose £400,000 to £6 million. However, day to day trading fell by about £1.5 million to just over £4.8 million.

Arena took over the running of Doncaster Racecourse from the council on a 99-year lease.

The firm owns 81 per cent of the venue and Doncaster Council 19 per cent.

For the first 30 years of the lease Arena receives 92.5 per cent of any profits.

Arena has received planning permission to build a £12 million 120-bedroom hotel and apartment development at the racecourse.

Work is expected to start in mid-2008 and be completed by the end of 2009.

Mr Elliott said the firm was in advanced talks with hotel chain Millennium & Copthorne about managing the four star hotel which would feature a restaurant and bar.

He added: "The hotel will operate closely with the extensive new facilities on the racecourse for the benefit of both, and will play an integral role in helping to transform Doncaster Racecourse into a world-class leisure, business and racing venue."