Dover Downs Gaming & Entertainment, Inc. Reports Results for the First Quarter Ended March 31, 2009

The Company's revenues fell 1.2% to $59,080,000 during the first quarter of 2009 compared with $59,789,000 for the first quarter of 2008. Gaming revenues decreased 2% during the quarter while other revenues were up 10.2% as a result of the Company's expanded entertainment complex. Total occupancy for the 500 room Dover Downs Hotel was 76% for the first quarter of 2009.

Gaming expenses were higher from increased gaming taxes and slot machine fees that resulted from legislation passed in June of 2008 that became effective on July 1, 2008. These increases were approximately $960,000 for the first quarter of 2009.

Interest expense decreased $298,000 during the quarter, primarily from lower interest rates which offset higher borrowings related to the casino expansion that was completed in the third quarter of 2008. Depreciation expense increased $567,000, primarily related to the casino expansion.

Net earnings were $4,293,000 compared with $5,321,000 for the first quarter of 2008. Net earnings per diluted share for the quarter were $.14 compared with $.17 last year.

Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment, Inc. stated, "Despite the continued decline in consumer spending during the first quarter, our commitment to reinvest in our property and to continually expand and enhance the gaming and other entertainment options available to our patrons combined with our award winning customer service, have enabled us to effectively retain our top-line and grow our market share during these difficult times."

The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.05 per share. The dividend is payable on June 10, 2009 to shareholders of record at the close of business on May 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, including multi-player electronic table games with virtual dealers; 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
                                      March 31,
                                      2009          2008
Revenues:
Gaming (1)                            $     54,903  $     56,000
Other operating (2)                         4,177         3,789
                                            59,080        59,789
Expenses:
Gaming                                      43,153        42,411
Other operating                             3,343         3,299
General and administrative                  1,730         1,764
Depreciation                                2,948         2,381
                                            51,174        49,855
Operating earnings                          7,906         9,934
Interest expense                            637           935
Earnings before income taxes                7,269         8,999
Income taxes                                2,976         3,678
Net earnings                          $     4,293   $     5,321
Net earnings per common share:
- Basic                               $     0.14    $     0.17
- Diluted                             $     0.14    $     0.17
Weighted average shares outstanding:
- Basic                                     31,485        31,426
- Diluted                                   31,485        31,667

(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.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
                                            March 31,          December 31,
                                            2009               2008
ASSETS
Current assets:
Cash                                        $    16,638        $    17,889
Accounts receivable                              3,987              2,661
Due from State of Delaware                       3,944              10,870
Inventories                                      2,104              2,025
Prepaid expenses and other                       2,381              2,029
Receivable from Dover Motorsports, Inc.          5                  -
Deferred income taxes                            1,224              1,317
Total current assets                             30,283             36,791
Property and equipment, net                      200,912            203,522
Other assets                                     976                1,019
Total assets                                $    232,171       $    241,332
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                            $    3,118         $    4,679
Purses due horsemen                              2,341              9,395
Accrued liabilities                              10,025             7,419
Payable to Dover Motorsports, Inc.               -                  11
Income taxes payable                             3,448              619
Deferred revenue                                 216                212
Total current liabilities                        19,148             22,335
Revolving line of credit                         99,500             108,325
Liability for pension benefits                   6,062              6,099
Other liabilities                                328                -
Deferred income taxes                            3,468              3,488
Total liabilities                                128,506            140,247
Stockholders' equity:
Common stock                                     1,547              1,521
Class A common stock                             1,660              1,660
Additional paid-in capital                       963                933
Retained earnings                                101,952            99,263
Accumulated other comprehensive loss             (2,457  )          (2,292  )
Total stockholders' equity                       103,665            101,085
Total liabilities and stockholders' equity  $    232,171       $    241,332

DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
                                                               Three Months Ended
                                                               March 31,
                                                               2009               2008
Operating activities:
Net earnings                                                   $    4,293         $    5,321
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation                                                        2,948              2,381
Amortization of credit facility origination fees                    10                 10
Stock-based compensation                                            238                277
Deferred income taxes                                               32                 22
Changes in assets and liabilities:
Accounts receivable                                                 (1,326  )          315
Due from State of Delaware                                          6,926              7,838
Inventories                                                         (79     )          36
Prepaid expenses and other                                          (326    )          (43     )
Receivable from/payable to Dover Motorsports, Inc.                  (16     )          (58     )
Accounts payable                                                    19                 1,152
Purses due horsemen                                                 (7,054  )          (8,768  )
Accrued liabilities                                                 2,606              (1,798  )
Income taxes payable                                                2,846              3,637
Deferred revenue                                                    4                  80
Other liabilities                                                   20                 (182    )
Net cash provided by operating activities                           11,141             10,220
Investing activities:
Capital expenditures                                                (1,918  )          (11,117 )
Net cash used in investing activities                               (1,918  )          (11,117 )
Financing activities:
Borrowings from revolving line of credit                            43,355             41,505
Repayments of revolving line of credit                              (52,180 )          (41,430 )
Dividends paid                                                      (1,604  )          (1,587  )
Repurchase of common stock                                          (45     )          (899    )
Proceeds from stock options exercised                               -                  12
Excess tax benefit on stock awards                                  -                  22
Net cash used in financing activities                               (10,474 )          (2,377  )
Net decrease in cash                                                (1,251  )          (3,274  )
Cash, beginning of period                                           17,889             22,456
Cash, end of period                                            $    16,638        $    19,182

SOURCE: Dover Downs Gaming & Entertainment, Inc.

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