April 15, 2005



Via US Mail and Facsimile

Mr. Timothy R. Horne
Chief Financial Officer
1131 North DuPont Highway
Dover, Delaware 19901

Re:	Dover Downs Gaming & Entertainment, Inc.
	Form 10-K for the year ended December 31, 2004
	Commission file #: 001-16791

Dear Mr. Horne:

We have reviewed your April 11, 2005 response letter and have the
following comments.  Please file an amended Form 10-K in response
to
our request for expanded or revised disclosure.  If you disagree,
we
will consider your explanation as to why our comments are
inapplicable or a revision is unnecessary.  We also ask you to
provide us with supplemental information so we may better
understand
your disclosure.  Please be as detailed as necessary in your
explanation.  We look forward to working with you in these
respects
and welcome any questions you may have about any aspects of our
review.


* * * * * * * * * * * * * * * * * * * * * * *


Form 10-K for the year ended December 31, 2004

Statement of Earnings, page 34

1. We note your response to comment 4.   In addition to your
proposed
expanded MD&A disclosure, please also disclose in the notes to the
consolidated financial statements (i.e. Revenue and expense
recognition, page 40) that an operating margin for "Other
Operating"
activities would be computed by netting promotional allowances
against gross revenues - other operating (i.e. "net" revenues -
other
operating) less "other operating" expenses.





Note 3.  Point Loyalty Program, page 39-40
MD&A - Results of Operations, page 15

2. We note from your response to comment 9 that you believe the
accounting treatment of recording a charge in the period of change
was appropriate.  After considering the points discussed in your
response, we believe that prior to 2004 you had a liability
related
to non-cash redeemable points that should have been recognized in
your consolidated financial statements and therefore your
accounting
treatment of the change may not be appropriate and should most
likely
be considered a correction of an error.  We have addressed your
significant response points in the discussion below.

First, we note your response that EITF 01-9 required your change
in
accounting policy.  We understand that once you made the decision
to
give cash for points, you were required to present that liability
as
a reduction of revenue, but we do not understand from your
response
how adding cash to the selection of redeemable gifts available to
your customers required you to change your accounting policy for
the
non-cash gifts and record a liability for those amounts.
Additionally, you state that the adoption or modification of an
accounting principle necessitated by transactions or events that
are
clearly different in substance from those previously occurring is
not
a "change in accounting principle."  We note from the statement of
earnings that the majority of your non-recurring gaming charge is
under the expense line item and relates to points redeemable for
products and services.  Assuming the prior accounting policy was a
generally accepted policy, which does not appear to be the case,
please tell us what transactions or events related to the non-cash
redeemable points are clearly different in substance in 2004 from
previous years that would cause the change to fall under the
exemption in paragraph 8 of APB 20.

Secondly, referring to the statement in your response in paragraph
2,
that your approach was common in the industry and put in place
when
you opened your facility in 1995, please provide details of other
casinos that have expensed points when redeemed and the time
period
during which they utilized this policy.   We do not believe the
fact
that this policy was put in place in 1995 by an industry leader,
in
itself supports the appropriateness of the accounting in the
subsequent years.  We note your position that the industry views
points as the cost of getting a customer to return to the
property,
akin to a coupon.  We do not believe this is a valid reason not to
accrue a liability and point out that companies in industries such
as
food, frequently issue coupons, presumably with the purpose of
getting customers back to buy more of their product, and record a
liability for the coupon amount at the time the coupon is given.
You
mention that your program is different from the airlines, where
there
is insignificant revenue generated upon redemption, however
theoretically one of your customers can come back to the casino
solely to redeem points just as theoretically, the airlines
frequent
flyer points can be redeemed by the frequent flyer who will not
significantly effect revenue on a flight.  On the other hand, just
as
you assume that your customers will probably come back to the
casino
and play more casino games, the airline frequent flyer may come
back
to the airlines to utilize the awards along with other fare paying
family members and friends who would be generating revenue for the
airlines.  Please advise us if you have found anything in the
accounting literature that takes into account whether or not
customers return to generate revenues, in the consideration of a
liability.

Additionally, in regards to considering your points akin to
"coupons," EITF 01-9 addresses coupons as an item similar to cash,
requiring them to be accrued when earned.  Therefore, please
explain
to us how your discussion on the type of loyalty program and your
statement at the end of paragraph 4 that, "for these reasons, we
believe that the costs incurred are appropriately recorded when
that
earnings process occurs at redemption," supports your decision
that
in 2004 there was a change that resulted in the determination that
a
liability was appropriate for the points (cash and non-cash) at
the
time they were earned.  Furthermore, as the customers earn points
on
prior play whereby revenue was previously recognized, the accrual
of
a liability (expense) when earned would have represented the
appropriate matching of costs with its associated revenues.
Although a customer has to redeem in person, they are not
obligated
to play to earn those previous points.  Therefore, we do not
concur
with your statement on your former historical treatment that "the
costs incurred are appropriately recorded when that earnings
process
occurs at redemption."

Further, in reference to your discussion of the characteristics of
a
liability, we believe that in addition to the three
characteristics
of a liability, you should consider paragraph 40 of Statement of
Financial Accounting Concepts No. 6 which addresses liabilities
that
stem from equitable or constructive obligations, that are commonly
paid in the same way as legally binding contracts, but lack the
legal
sanction that characterizes most liabilities and may be binding
primarily because of social or moral sanctions or custom.  We
believe
that although legally you may terminate the program and not be
bound
to pay out all points, there is a constructive obligation you have
when setting up a point program such as your current program.  In
addition, other industries, such as the airline industry, may set
up
a loyalty program (e.g. frequent flyer mileage) with similar
features
whereby they reserve the right to terminate or change the
provisions
of their programs but they have historically still estimated and
accrued a liability for the programs expense upon points being
earned.  Please supplementally address how you considered
paragraph
40 of SFAC No. 6 in your determination of whether a liability
existed
prior to 2004 for non-cash redeemable points.

We note your response that even if the change was considered to be
a
correction of an error the impact would be immaterial.  The
consideration of immateriality should include all annual and
quarterly amount and it appears that the 4th quarter fiscal 2004
charge was material to the operating results of that quarter based
on
the data in note 12 (page 50).   You have responded that in the
fourth quarter you fully discussed the changes in the points
program,
however we do not believe your discussion was of the appropriate
accounting treatment.  We continue to believe that if the change
represents a correction of an error, it appears that prior
consolidated financial statements should be restated accordingly.
In
this regard, the disclosure in the notes should set forth in a
clear
and transparent manner that the consolidated financial statements
have been revised for the misapplication of GAAP in prior periods
(including the prior and current accounting treatment.)

Finally, we do not understand how you have determined that the
impact
on the past three years would be approximately $180,000 per year.
Considering that the non-recurring charge is $1,802,000 (non-cash
points only) in 2004, it would seem that a higher amount of that
total would have been earned during the last three years, with a
much
lesser amount outstanding from the earlier years.  Please tell us
how
this allocation was determined and what the prior period
adjustments
would be for each of the quarters and years ended 2002, 2003 and
2004, as this assessment should consider the immateriality on all
annual and quarterly consolidated financial statements.

We believe that the accounting for this transaction as a non-
recurring charge in the current year may not be appropriate.
Please
advise and revise your consolidated financial statements and MD&A
accordingly.

* * * * * * * * * * * * * * * * * * * * * * *

As appropriate, please respond to these comments within 10
business
days or tell us when you will provide us with a response.  Please
furnish a cover letter that keys your responses to our comments
and
provides any requested supplemental information.

You may contact Claire Lamoureux at 202-824-5663 or Joseph Foti at
202-942-1952 if you have questions.
								Sincerely,


								Linda Cvrkel
								Branch Chief
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Dover Downs Gaming & Entertainment, Inc.
April 15, 2005
Page 1