The original site for the Port MacDonnell Racecourse, records show that races occurred somewhere between two and a half to four miles east of Port MacDonnell. The first race meeting of any importance was conducted on 1 September 1861. During the meeting it is reported that Adam Lindsay Gordon won the steeplechase on a horse name 'Vanguard'.
It appears that two sites were used, one near the beach and the other on the northern side of the swamp, which provided a drier and firmer track. It was considered the ground was well adapted to the purpose of racing. By 1885 it was hoped that the land would be reserved for the township of Port MacDonnell, but it appears this never occurred.
The area took on the name as a reminder of its early historical use. Now, Racecourse Bay is a small quiet town, with limited area for expansion. Although no shops are there, Port MacDonnell is only a short distance away. Limited access to the beach provides fishing for the locals.