Dover Downs Gaming & Entertainment : 2017 Second Quarter Earning Release

FOR IMMEDIATE RELEASE For further information, call:

Timothy R.Horne -Sr.Vice President-Finance

Dover, Delaware,July 27,2017

[phone]

DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTSRESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2017

Dover Downs Gaming & Entertainment, Inc.(NYSE:ODE) today reported results for the three months ended June 30,2017.

The Company's revenues for thesecond quarter of 2017 were $43,305,000 compared with

$46,224 ,000 for the second quarter of 2016 .Gaming revenues were $36,418,000compared to

$39,058,000 for the second quarter of last year .The decrease is primarily attributable to increased competition in the mid-Atlantic gaming market.

Other operating revenuesdecreased to $6,887,000 from $7,166,000 for thesecond quarter of2016 primarily due to lower banquet revenue in the second quarter of 2017.Occupancy levels in the Dover Downs Hotel were approximately 85% for the second quarter of 2017 compared with 88%during thesecond quarter lastyear.

General and administrative ,depreciation and interest expenses were each fairly consistent with thesecond quarter of 2016.

Net earningswere $32,000 compared with$796 ,000 for the second quarter of 2016. Earnings per dilutedshare were$.00 in the secondquarter of 2017 compared with $.02 for the second quarterof 2016.

* * *

This release contains or may contain forward-looking statementsbased on management's beliefs andassumptions .Such statements are subject to various risksand uncertaintiesthat could cause resultsto vary materially.Pleaserefer to the Company's SEC filings for a discussionof such factors.

Owned by Dover Downs Gaming &Entertainment, Inc.(NYSE:DOE), DoverDowns Hotel&Casino®is apremier gaming and entertainment resort destination in the Mid-Atlantic region.Gaming operations consistof approximately 2,200 slots and a full complement of table gamesincluding poker.The AAA-rated FourDiamond hotel is Delaware's largest with 500 luxurious rooms/suites and amenities including a full-servicespa/salon ,concert hall and 41 ,500 sq.ft. of multi-use event space. Live,world-class harness racing isfeatured November through April,and horse racing issimulcast year-round. Professional football parlaybetting isaccepted during the season. Additional property amenities include multiple restaurants from finedining to casual fare,bars/lounges and retail shops.For moreinformation, please visit

www.doverdowns .com.

DOVER DOWNS GAMING & ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OFEARNINGS (LOSS)

In Thousands, ExceptPer Share Amounts (Unaudited)

)

Revenues:Gaming 1

Three Months Ended SixMonths Ended June 30,June 30,

2017 2016 20172016

$36,418 $39,058 $75,065$78,416

Otheroperating2)6,887 7,166 12,38812,525

43 ,305 46 ,224 87,45390,941

Expenses:

Gaming 34,970 36,741 71,839 74,236

Other operating 4,737 4,7268,687 8,699

General and administrative 1,289 1,295 2,6202,623

Depreciation 2,086 1,953 4,0323,840

43 ,082 44 ,715 87,17889,398

Operating earnings 223 1,509 2751,543

Interest expense (208) (218) (417)(447)

Earnings (loss) before income taxes 15 1,291 (142)1,096 Income tax benefit (expense) 17 (495) (10) (539)

Netearnings(loss)$32 $796 $(152)$557

Net earnings per common share:

- Basic$ $ 0.02$ $ 0.02

- Basic	32,322	32,202	32,321	32,200
- Diluted	32,322	32,202	32,321	32,200

- Diluted$ $ 0.02$ $ 0.02Weighted averageshares outstanding:

1

)Gaming revenues from theCompany's slot machine and table game operations includethe total win fromsuch operations.

The Delaware StateLottery Office collectsthe win and remits aportion thereof to the Company asits commission for acting

as a LicensedAgent. Thedifference between totalwin and theamount remittedto the Company is reflectedin gaming expenses.

2

l Otheroperating revenues donot include the retail amount ofpromotional allowances which are providedto customers on a

complimentary basis.

CONSOLIDATED BALANCE SHEETS

In Thousands (Unaudited)

ASSETS

Current assets: Cash

Accounts receivable

Due from State of Delaware Inventories

Prepaid expenses and other

Receivable from Dover Motorsports, Inc.Income taxes receivable

Total current assets

June 30,

2017

$ 10,446

2,394

3,827

2,187

2,755

33

96

21,738

December 31,

2016

$ 11,677

3,507

7,285

1,910

2,365

7

221

26,972

Property and equipment, net	137,701	140,714
Other assets	571	594
Deferred income taxes	2,144	2,020
Total assets	$ 162,154	$ 170,300
LIABILITIES AND STOCKHOLDERS'	EQUITY
Current liabilities:
Accounts payable	$ 3,301	$ 3,749
Purses due horsemen	3,867	7,649
Accrued liabilities	8,315	9,732
Deferred revenue	453	361

Revolving line of creditTotal current liabilities

15,936

25,250

46 ,741

Revolving line of credit	23,000
Liability for pension benefits	7,534	7,897
Total liabilities	46,470	54,638
Stockholders' equity:
Common stock	1,828	1,814
Class A common stock	1,487	1,487
Additional paid-in capital	5,767	5,669
Retained earnings	111,136	111,288
Accumulated other comprehensive loss	(4,534)	(4,596)
Total stockholders' equity	115,684	115,662
Total liabilities and stockholders' equity	$ 162,154	$ 170,300

CONSOLIDATED STATEMENTS OF CASHFLOWS

In Thousands(Unaudited)

Six Months Ended June 30,

2017	2016
Operating activities: Net (loss) earnings	$ (152)	$ 557
Adjustments to reconcile net (loss) earnings
to net cash provided by operating activities:
Depreciation	4,032	3,840
Amortization of credit facility origination fees	26	52
Stock-based compensation	186	177
Deferred income taxes	(165)	(47)
Changes in assets and liabilities:
Accounts receivable	1,113	962
Due from State of Delaware	3.458	3,655
Inventories	(277)	(139)
Prepaid expenses and other	(389)	193
Receivable from/payable to Dover Motorsports. Inc.	(26)	(58)
Income taxes receivable/payable	124	410
Accounts payable	(271)	155
Purses due horsemen	(3.782)	(3, 139)
Accrued liabilities	(1.417)	(1,221)
Deferred revenue	92	132
Liability for pension benefits	(261)	(211)
Net cash provided by operating activities	2,291	5 ,318
Investing activities :
Capital expenditures	(1,196)	(1,939)
Purchase of available-for-sale securities	(40)	( 11)
Proceeds from sale of available-for-sale securities	38	9
Net cash used in investing activities	(1,198)	(1,941)
Financing activities:
Borrowings from revolving line of credit	46,720	20,830
Repayments of revolving line of credit	(48,970)	(24,330)
Repurchase of common stock	(74)	(66)
Net cash used in financing activities	(2,324)	(3,566)
Net decrease in cash	(1.231)	.(189)
Cash, beginning of period	11,677	10.496
Cash, end of period	$ 10.446	$ 10,307