Gaming expenses were higher from significantly increased gaming taxes and fees that became effective at the end of May of 2009. The impact of these tax increases was approximately $3.6 million or $.07 per diluted share for the third quarter of 2009.

Occupancy levels in the 500 room Dover Downs Hotel were approximately 95% for the third quarter of 2009, but cash room sales were lower than the comparable quarter last year. Margins for all other revenues improved during the quarter.

The Company had previously completed architectural and engineering work related to a Phase 7 casino expansion that would have included, among other things, a new sports book facility and a parking garage. Given the recent US Court of Appeals for the Third Circuit decision to limit the extent of sports wagering in Delaware and the higher gaming tax rates that were recently legislated, the Company has decided not to proceed with this project. As a result, $2,177,000 of previously capitalized costs related to this project were written off during the quarter.

Interest expense decreased $406,000 during the quarter, primarily from lower average borrowings and lower interest rates.

Excluding the impact of the non-cash impairment charge, net earnings were $2,523,000, or $.08 per diluted share, compared with $4,996,000, or $.16 per diluted share for the third quarter of 2008.

Including the impairment charge, net earnings were $1,231,000, or $.04 per diluted share.

Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment, Inc. stated, "Thanks to the high quality amenities we've assembled in recent years, our revenues held up fairly well considering the current operating environment. Our task will now be to continue to strive for growth and margin improvements".

The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.05 per share. The dividend is payable on December 10, 2009 to shareholders of record at the close of business on November 10, 2009.

This release contains or may contain forward-looking statements based on management's beliefs and assumptions. Such statements are subject to various risks and uncertainties that could cause results to vary materially. Please refer to the Company's SEC filings for a discussion of such factors.

Dover Downs Gaming & Entertainment, Inc. is a diversified gaming and entertainment company whose operations consist of Dover Downs Slots -- a 165,000-square foot video lottery casino complex featuring the latest in slot machine offerings, multi-player electronic table games and a new Race and Sports Book; the Dover Downs Hotel and Conference Center -- a 500 room AAA Four Diamond hotel with conference, banquet, fine dining, ballroom and concert hall facilities; and Dover Downs Raceway -- a harness racing track with pari-mutuel wagering on live and simulcast horse races.

DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
                                     Three Months Ended      Nine Months Ended
                                     September 30,           September 30,
                                     2009        2008        2009         2008
Revenues:
Gaming (1)                           $   55,172  $   58,576  $   163,385  $   169,219
Other operating (2)                      4,642       5,353       14,039       14,470
                                         59,814      63,929      177,424      183,689
Expenses:
Gaming                                   46,815      45,733      132,431      129,587
Other operating                          3,613       4,281       10,864       11,762
General and administrative               1,679       1,572       5,187        4,932
Impairment charge                        2,177       -           2,177        -
Depreciation                             2,898       2,885       8,919        7,745
                                         57,182      54,471      159,578      154,026
Operating earnings                       2,632       9,458       17,846       29,663
Interest expense                         569         975         1,834        2,541
Earnings before income taxes             2,063       8,483       16,012       27,122
Income taxes                             832         3,487       6,550        11,107
Net earnings                         $   1,231   $   4,996   $   9,462    $   16,015
Net earnings per common share:
- Basic                              $   0.04    $   0.16    $   0.30     $   0.50
- Diluted                            $   0.04    $   0.16    $   0.30     $   0.50
Weighted average shares outstanding:
- Basic                                  31,496      31,443      31,491       31,434
- Diluted                                31,496      31,516      31,491       31,556

_________________________
(1)       Gaming revenues from the Company's video lottery (slot) machine
          operations include the total win from such operations. The Delaware
          State Lottery Office collects the win and remits a portion thereof
          to the Company as its commission for acting as a Licensed Agent. The
          difference between total win and the amount remitted to the Company
          is reflected in gaming expenses.
(2)       Other operating revenues do not include the retail amount of
          promotional allowances which are provided to customers on a
          complimentary basis.

DOVER DOWNS GAMING & ENTERTAINMENT, INC.
RECONCILIATION OF GAAP EARNINGS TO ADJUSTED EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
                                                     Three Months Ended      Nine Months Ended
                                                     September 30,           September 30,
                                                     2009        2008        2009         2008
GAAP earnings before income tax expense              $    2,063  $    8,483  $    16,012  $    27,122
Non-cash impairment charges (1)                           2,177       -           2,177        -
Adjusted earnings before income tax expense          $    4,240  $    8,483  $    18,189  $    27,122
GAAP net earnings                                    $    1,231  $    4,996  $    9,462   $    16,015
Non-cash impairment charges, net of income taxes (1)      1,292       -           1,292        -
Adjusted net earnings                                $    2,523  $    4,996  $    10,754  $    16,015
GAAP net earnings per common share - diluted         $    0.04   $    0.16   $    0.30    $    0.50
Non-cash impairment charges, net of income taxes (1)      0.04        -           0.04         -
Adjusted net earnings per common share - diluted     $    0.08   $    0.16   $    0.34    $    0.50

_________________________
(1)       We had previously completed architectural and engineering work
          related to a Phase 7 casino expansion that would have included,
          among other things, a new sports book facility and a parking
          garage.Given the recent court decision to limit the extent of
          sports wagering and the higher gaming tax rates that were recently
          legislated, we decided not to proceed with this project.As a
          result, $2,177,000 of previously capitalized costs were written
          off during the quarter.

DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
                                            September 30,      December 31,
                                            2009               2008
ASSETS
Current assets:
Cash                                        $    17,526        $    17,889
Accounts receivable                              2,682              2,661
Due from State of Delaware                       12,479             10,870
Inventories                                      2,258              2,025
Prepaid expenses and other                       2,918              2,029
Receivable from Dover Motorsports, Inc.          35                 -
Prepaid income taxes                             807                -
Deferred income taxes                            1,217              1,317
Total current assets                             39,922             36,791
Property and equipment, net                      195,445            203,522
Other assets                                     893                1,019
Total assets                                $    236,260       $    241,332
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                            $    3,623         $    4,679
Purses due horsemen                              11,283             9,395
Accrued liabilities                              6,392              7,419
Payable to Dover Motorsports, Inc.               -                  11
Income taxes payable                             -                  619
Deferred revenue                                 376                212
Total current liabilities                        21,674             22,335
Revolving line of credit                         98,075             108,325
Liability for pension benefits                   6,322              6,099
Other liabilities                                200                -
Deferred income taxes                            3,730              3,488
Total liabilities                                130,001            140,247
Stockholders' equity:
Common stock                                     1,546              1,521
Class A common stock                             1,660              1,660
Additional paid-in capital                       1,426              933
Retained earnings                                103,914            99,263
Accumulated other comprehensive loss             (2,287  )          (2,292  )
Total stockholders' equity                       106,259            101,085
Total liabilities and stockholders' equity  $    236,260       $    241,332

DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
                                                         Nine Months Ended
                                                         September 30,
                                                         2009              2008
Operating activities:
Net earnings                                             $     9,462       $     16,015
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation                                                   8,919             7,745
Amortization of credit facility origination fees               28                30
Stock-based compensation                                       714               762
Deferred income taxes                                          70                (156     )
Impairment charge                                              2,177             -
Changes in assets and liabilities:
Accounts receivable                                            (21      )        1,393
Due from State of Delaware                                     (1,609   )        (2,026   )
Inventories                                                    (233     )        (284     )
Prepaid expenses and other                                     (746     )        (1,446   )
Receivable from/payable to Dover Motorsports, Inc.             (46      )        (11      )
Prepaid income taxes/income taxes payable                      (1,294   )        (291     )
Accounts payable                                               48                464
Purses due horsemen                                            1,888             1,737
Accrued liabilities                                            (1,027   )        (1,756   )
Deferred revenue                                               164               282
Other liabilities                                              388               71
Net cash provided by operating activities                      18,882            22,529
Investing activities:
Capital expenditures                                           (4,123   )        (36,377  )
Proceeds from the sale of available-for-sale securities        102         -
Purchase of available-for-sale securities                      (104     )        (100     )
Net cash used in investing activities                          (4,125   )        (36,477  )
Financing activities:
Borrowings from revolving line of credit                       120,675           145,900
Repayments of revolving line of credit                         (130,925 )        (130,250 )
Dividends paid                                                 (4,811   )        (4,769   )
Repurchase of common stock                                     (59      )        (1,040   )
Proceeds from stock options exercised                          -                 366
Excess tax benefit on stock awards                             -                 25
Net cash (used in) provided by financing activities            (15,120  )        10,232
Net decrease in cash                                           (363     )        (3,716   )
Cash, beginning of period                                      17,889            22,456
Cash, end of period                                      $     17,526      $     18,740

SOURCE: Dover Downs Gaming & Entertainment, Inc.

Dover Downs Gaming & Entertainment, Inc. 
Timothy R. Horne - Sr. Vice President-Finance 
(302) 857-3292

To listen to the conference call, you should dial 312-470-7331 five to ten minutes before the scheduled start time and request to be connected to the Dover Downs Gaming & Entertainment conference call, conference ID is GAMING, leader is Denis McGlynn.

If you wish to listen to a playback of the conference call, you may dial 203-369-1217 beginning one hour after the conference call. The playback will be available until November 5.

Dover Downs Gaming & Entertainment is a diversified gaming and entertainment company whose operations consist of Dover Downs Slots - a 165,000-square-foot video lottery casino complex; the Dover Downs Hotel and Conference Center - a 500 room AAA Four Diamond hotel with conference, banquet, fine dining, ballroom and concert hall facilities; and Dover Downs Raceway - a harness racing track with pari-mutuel wagering on live and simulcast horse races.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

Expected next dividend:
Dividend Announcement Date: 7/29/2009
Dividend Record Date: 8/10/2009
Dividend Pay Date: 9/10/2009
Dividend Amount: 0.05

SOURCE: Dover Downs Gaming & Entertainment, Inc.

Dover Downs Gaming & Entertainment, Inc. 
Timothy R. Horne - Sr. Vice President-Finance 
302-857-3292