Steven Kent of Goldman Sachs does not believe that the gaming market is going to pick up as quickly as other analysts have lead investors to believe, resulting in the downgrade of Bally Technologies (BYI: N/A +0%) from “Neutral” to “Sell”.

“Gaming industry growth to new markets should be relatively flat over the next several years” Kent wrote in a research note to investors of the firm.

Kent said he remains cautious on the sector, and believes analyst expectations for Bally are too high since there is little chance for a recovery until 2012 when states including Illinois, Ohio and Maryland should begin rolling out new gaming facilities.

With that in mind, Bally’s share price “looks expensive especially with earnings momentum slowing,” he wrote.

Shares of Bally fell $1.92, or 4.7 percent, to $38.90. The stock has traded between $26.07 and $47.47.