Dover Downs to Offer Shares

DOVER, Delaware – (PRESS RELEASE) -- Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE), today announced that its Board of Directors has authorized the Company to commence a tender offer to purchase up to 1,040,421 shares of its Common Stock and up to 1,607,506 shares of its Class A Common Stock at a fixed price of $12.00 per share.

The number of shares proposed to be purchased in the tender offer represents approximately 10% of the Company's total shares outstanding. Based on the closing price per share of the Company's Common Stock on the New York Stock Exchange on November 4, 2004 of $10.17 per share, the offer represents a premium of 18%.

If the offer commences, as expected, on Wednesday, November 10, 2004, then the offer and withdrawal rights would expire at 5:00 P.M., New York City time, on Friday, December 10, 2004, unless extended. The Company expects to pay for tendered shares with available cash on hand and amounts borrowed under the Company's unsecured revolving credit facility, as recently amended.

Commenting on the announcement, Denis McGlynn, the Company's President and Chief Executive Officer noted, "We believe that a share repurchase effected by the offer announced today is consistent with our long-term goals of increasing earnings per share and maximizing stockholder value. This flows from our belief that the repurchase of our shares is currently a prudent use of our funds and that it will be accretive to earnings per share for stockholders who do not sell their shares in the offer. The tender offer affords us the opportunity to return cash to stockholders who elect to tender their shares at a premium over recent trading prices without the usual transaction costs associated with open market sales, while at the same time increasing non- tendering stockholders' proportionate interest in our Company and thus in our future earnings and assets at no additional cost to them."

If holders of more than 1,040,421 shares of Common Stock or 1,607,506 shares of Class A Common Stock properly tender and do not withdraw their shares, then the Company will purchase shares so tendered by those stockholders owning fewer than 100 shares who tender all of their shares without proration, and all other shares will be purchased on a pro rata basis by class, subject to the conditional tender offer provisions that will be described in the offer to purchase to be distributed to stockholders. Stockholders whose shares are purchased in the offer will be paid the purchase price in cash, without interest, after the expiration of the offer period. The offer is not contingent upon any minimum number of shares being tendered. The offer is subject, however, to a number of other terms and conditions to be specified in the offer to purchase to be distributed to stockholders. No brokerage fees or commissions will be charged to holders of record who tender their shares directly to the Depositary. Holders who tender their shares through a broker, dealer or custodian may be required by such entity to pay a service charge or other fee.

The tender offer is not subject to any financing contingency. In conjunction with this announcement, the Company has entered into an amendment of its unsecured revolving credit facility with Wilmington Trust Company to extend the term of the facility until October 31, 2007 and to increase the credit line to $57.5 million.

The Company's directors and executive officers have advised the Company that they do not intend to tender any shares of Common Stock or Class A Common Stock in the offer. The Company has been advised that the Estate of John W. Rollins intends to tender approximately 1,500,000 shares of Class A Common Stock, representing approximately 21% of its Class A holdings. The Estate also owns 200,000 shares of Common Stock which it intends to tender. Other Class A stockholders have indicated an intention to tender approximately 100,000 shares. The Company currently anticipates that all or substantially all of the 1,607,506 shares of Class A Common Stock offered to be purchased will be tendered.

The Dealer Manager for the tender offer will be Raymond James & Associates, Inc. Mellon Investor Services LLC will act as the Information Agent and Depositary.