The seaside suburb of Mentone in the nineteenth century was the perfect setting for the establishment of a proprietary racecourse, with the soil a rich sandy loam and the advantage that horses could be exercised safely. Trainers and horse owners were eager to move to the southern coastal region of metropolitan Melbourne.

The racecourse at Mentone was operated by a public company, the Mentone Racing Company Limited, which was formed in 1888. The date of incorporation was 22 March 1888 and the registered office was at 18 Normanby Chambers, Chancery Lane, Melbourne. The capital investment was fifty thousand pounds; fifty thousand shares at one pound each. The subscriber shareholders included: E D Dyers of Surrey Hills – Estate Agent, Charles James Potts of Mentone – Solicitor, John Langtree Reilly of Melbourne – Surveyor, John Stephen Potts of East Melbourne – Journalist, Rowland Wilks of Melbourne – Estate Agent: each of these men held 2500 shares. Charles James Potts was also the company’s Solicitor.

The course was situated on 156 acres of land, half a mile from the Mentone railway station. The deed for the purchase of land from the Victorian Land Company was signed on 4 December 1888. The establishment of the railway system to Mordialloc in 1881 had encouraged subdivision of the land which led to an increase in the permanent population. This rail service provided the necessary mode for patrons to attend the races at Mentone.