the gap you are seeing comes from two places, one is the widget bottom margin - this is set to a default of 15px to give spacing between widgets in the sidebars (see ATO->Style WIDGETS->Widget Container)
You don't want to change this because it will effect the sidebar styling, instead you need to add a CSS insert like this to shut it off for your widget area
HTML Code:
div.bfa_widget_area div.widget { margin-bottom: 0px;}
the second part of the spacing is being caused by the CSS for the slide show. You will need to look at this CSS to figure out what it is using for the padding/margin of the slide show.