DOVER, Del.–(EMWNews)–Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE) today reported

results for the three months ended June 30, 2008.

The Company’s revenues increased 3.6% to

$59,971,000 compared with $57,868,000 for the second quarter of 2007.

Gaming revenues improved 2.5% compared to the second quarter of 2007,

primarily the result of increased slot win. Other operating revenues

improved 16.7% from higher room revenue resulting from the Company’s

expanded hotel and from higher food and beverage revenues. Occupancy

levels in the Dover Downs Hotel were approximately 81% for the second

quarter of 2008.

Gaming expenses were higher from the increased revenue, as well as from

certain one time expenses incurred during the quarter due to special

legislation enacted in June 2007 applicable to the State of Delaware’s

fiscal year ended June 2008 only. These non-recurring gaming expenses

were approximately $550,000 in the quarter and related to a guaranteed

tax that the Company was obligated to pay and a tax on promotional slot

play in excess of a legislative limit for the period.

Interest expense increased $180,000 to $631,000 during the quarter,

primarily from borrowings related to share buybacks. In addition,

interest related to the Dover Downs Hotel expansion ceased being

capitalized upon its opening in October of 2007. Depreciation expense

increased $744,000, primarily related to the expansion of the Dover

Downs Hotel.

Net earnings were $5,698,000 compared with $6,404,000 for the second

quarter of 2007. Net earnings per diluted share were $.18 for the

quarter compared with $.20 per diluted share in 2007.

Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment,

Inc. stated, “We are pleased with our results

for the second quarter, especially given the tenuous economic

environment. We were able to grow our slot win and overall revenues

during a challenging quarter, and believe our recent expansion projects

will continue to help us grow.”

The Company’s Phase VI casino expansion, The

Colonnade, was partially opened to the public on July 10 with Doc

Magrogan’s Oyster House, Sweet Perks Too, the

Dover Downs’ Fire & Ice Lounge and more than

500 slot machines debuting. Two more restaurants and four retail outlets

are scheduled to open in late summer.

The Company announced yesterday that its Board of Directors declared a

regular quarterly dividend of $.05 per share. The dividend is payable on

September 10, 2008 to shareholders of record at the close of business on

August 10, 2008.

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 (slots) casino complex; the Dover

Downs Hotel and Conference Center – featuring

luxury accommodations 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						Six Months Ended
		June 30,						June 30,
			2008			2007			2008			2007
Revenues:
Gaming (1)		$	54,643		$	53,303		$	110,643		$	110,275
Other operating (2)			5,328			4,565			9,117			8,224
			59,971			57,868			119,760			118,499
Expenses:
Gaming			41,443			39,292			83,854			81,143
Other operating			4,182			4,001			7,481			7,281
General and administrative			1,596			1,534			3,360			3,104
Depreciation			2,479			1,735			4,860			3,477
			49,700			46,562			99,555			95,005
Operating earnings			10,271			11,306			20,205			23,494
Interest expense			631			451			1,566			975
Earnings before income taxes			9,640			10,855			18,639			22,519
Income taxes			3,942			4,451			7,620			9,234
Net earnings		$	5,698		$	6,404		$	11,019		$	13,285
Net earnings per common share:
– Basic		$	0.18		$	0.20		$	0.35		$	0.41
– Diluted		$	0.18		$	0.20		$	0.35		$	0.41
Weighted average shares outstanding:
– Basic			31,434			32,341			31,430			32,321
– Diluted			31,585			32,783			31,626			32,716

(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)
		June 30,				December 31,
			2008				2007
ASSETS
Current assets:
Cash		$	19,678			$	22,456
Accounts receivable			2,758				4,560
Due from State of Delaware			5,690				10,530
Inventories			2,049				1,858
Prepaid expenses and other			2,485				2,251
Receivable from Dover Motorsports, Inc.			1				–
Prepaid income taxes			219				–
Deferred income taxes			1,193				1,227
Total current assets			34,073				42,882
Property and equipment, net			202,185				182,298
Other assets			127				–
Total assets		$	236,385			$	225,180
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	11,906			$	13,382
Purses due horsemen			4,622				9,689
Accrued liabilities			9,498				11,940
Payable to Dover Motorsports, Inc.			–				18
Income taxes payable			–				341
Deferred revenue			363				98
Total current liabilities			26,389				35,468
Revolving line of credit			105,000				92,425
Liability for pension benefits			2,447				2,510
Deferred income taxes			5,226				5,178
Total liabilities			139,062				135,581
Stockholders’ equity:
Common stock			1,481				1,474
Class A common stock			1,700				1,700
Additional paid-in capital			462				63
Retained earnings			93,953				86,640

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