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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 321,985	$ 246,385
Receivables, net of allowance for doubtful accounts of $3,581 and $3,332 at June 30, 2011 and December 31, 2010, respectively	51,822	44,463
Insurance receivable	842
Prepaid expenses	32,883	72,393
Deferred income taxes	25,459	25,206
Other current assets	52,494	77,506
Total current assets	485,485	465,953
Property and equipment, net	2,179,737	1,965,774
Other assets
Investment in and advances to unconsolidated affiliates	142,978	64,120
Goodwill	1,183,057	1,185,756
Other intangible assets	418,923	415,152
Debt issuance costs, net of accumulated amortization of $51,315 and $45,234 at June 30, 2011 and December 31, 2010, respectively	22,991	27,742
Loan receivable		230,500
Other assets	114,297	107,882
Total other assets	1,882,246	2,031,152
Total assets	4,547,468	4,462,879
Current liabilities
Current maturities of long-term debt	3,052	357,927
Accounts payable	19,391	17,312
Accrued expenses	92,786	101,447
Accrued interest	23,851	36,597
Accrued salaries and wages	69,271	73,432
Gaming, pari-mutuel, property, and other taxes	39,517	46,449
Insurance financing	5,677	11,602
Other current liabilities	55,472	46,763
Total current liabilities	309,017	691,529
Long-term liabilities
Long-term debt, net of current maturities	2,095,084	1,813,196
Deferred income taxes	165,815	134,572
Noncurrent tax liabilities	30,473	36,846
Other noncurrent liabilities	8,970	8,970
Total long-term liabilities	2,300,342	1,993,584
Shareholders' equity
Preferred stock ($.01 par value, 1,000,000 shares authorized, 12,275 shares issued and outstanding at June 30, 2011 and December 31, 2010)
Common stock ($.01 par value, 200,000,000 shares authorized, 78,868,643 and 78,414,022 shares issued at June 30, 2011 and December 31, 2010, respectively)	783	779
Additional paid-in capital	1,469,031	1,446,932
Retained earnings	468,368	337,940
Accumulated other comprehensive loss	(73)	(7,885)
Total shareholders' equity	1,938,109	1,777,766
Penn National Gaming, Inc. and subsidiaries shareholders' equity:
Total liabilities and shareholders' equity	$ 4,547,468	$ 4,462,879

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2011	Dec. 31, 2010
Condensed Consolidated Balance Sheets
Receivables, allowance for doubtful accounts (in dollars)	$ 3,581	$ 3,332
Debt issuance costs, accumulated amortization (in dollars)	$ 51,315	$ 45,234
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	12,275	12,275
Preferred stock, shares outstanding	12,275	12,275
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	78,868,643	78,414,022

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues
Gaming	$ 622,873	$ 543,190	$ 1,231,984	$ 1,086,563
Food, beverage and other	94,391	84,752	179,680	165,184
Management service fee	4,037	4,012	7,354	7,206
Revenues	721,301	631,954	1,419,018	1,258,953
Less promotional allowances	(33,422)	(33,643)	(64,116)	(68,319)
Net revenues	687,879	598,311	1,354,902	1,190,634
Operating expenses
Gaming	327,033	289,621	647,789	580,482
Food, beverage and other	75,257	66,628	143,849	129,848
General and administrative	102,322	106,953	205,798	201,469
Depreciation and amortization	54,230	52,653	107,388	103,833
Impairment losses		30,590		30,726
Insurance recoveries, net of deductible charges	(11,555)	155	(13,249)	214
Total operating expenses	547,287	546,600	1,091,575	1,046,572
Income from operations	140,592	51,711	263,327	144,062
Other income (expenses)
Interest expense	(26,109)	(32,911)	(55,135)	(67,203)
Interest income	96	611	149	1,341
Gain (loss) from unconsolidated affiliates	431	(425)	(1,923)	(1,837)
Loss on early extinguishment of debt		(519)		(519)
Other	(701)	1,307	(2,344)	(14)
Total other expenses	(26,283)	(31,937)	(59,253)	(68,232)
Income from operations before income taxes	114,309	19,774	204,074	75,830
Taxes on income	38,320	12,802	76,557	32,703
Net income including noncontrolling interests	75,989	6,972	127,517	43,127
Less: Net loss attributable to noncontrolling interests		(2,184)		(2,193)
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$ 75,989	$ 9,156	$ 127,517	$ 45,320
Earnings per common share attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Basic earnings per common share (in dollars per share)	$ 0.79	$ 0.09	$ 1.32	$ 0.47
Diluted earnings per common share (in dollars per share)	$ 0.71	$ 0.09	$ 1.19	$ 0.42

Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Noncontrolling Interests	Comprehensive Income (Loss)
Balance at Dec. 31, 2009	$ 1,852,076,000		$ 786,000	$ 1,480,476,000	$ 397,407,000	$ (26,028,000)	$ (565,000)
Balance (in shares) at Dec. 31, 2009		12,500	78,972,256
Increase (Decrease) in Shareholders' Equity
Repurchase of preferred stock	(11,200,000)			(11,200,000)
Repurchase of preferred stock (in shares)		(225)
Stock option activity, including tax benefit of $2,058 and $288 for six months ended June 30, 2011 and 2010, respectively	13,519,000		$ 2,000	13,517,000
Stock option activity (in shares)			243,734
Share activity	(9,912,000)		$ (3,000)	(9,909,000)
Share activity (in shares)			(408,790)
Restricted stock activity	3,221,000			3,221,000
Restricted stock activity (in shares)			165,110
Change in fair value of interest rate swap contracts, net of income taxes of $3,610 and $4,171 for six months ended June 30, 2011 and 2010, respectively	7,002,000					7,002,000		$ 7,002,000
Change in fair value of corporate debt securities	744,000					744,000		744,000
Foreign currency translation adjustment	14,000					14,000		14,000
Net income (loss)	43,127,000				45,320,000		(2,193,000)	43,127,000
Comprehensive Income (Loss)								50,887,000
Balance at Jun. 30, 2010	1,898,591,000		$ 785,000	1,476,105,000	442,727,000	(18,268,000)	(2,758,000)
Balance (in shares) at Jun. 30, 2010		12,275	78,972,310
Increase (Decrease) in Shareholders' Equity
Stockholders' Equity, Period Increase (Decrease)	46,515,000
Balance at Dec. 31, 2009	$ 1,852,076,000		$ 786,000	1,480,476,000	397,407,000	(26,028,000)	$ (565,000)
Balance (in shares) at Dec. 31, 2009		12,500	78,972,256
Increase (Decrease) in Shareholders' Equity
Repurchase of preferred stock (in shares)	(225)
Balance at Dec. 31, 2010	$ 1,777,766,000		$ 779,000	1,446,932,000	337,940,000	(7,885,000)
Balance (in shares) at Dec. 31, 2010		12,275	78,414,022
Increase (Decrease) in Shareholders' Equity
Stock option activity, including tax benefit of $2,058 and $288 for six months ended June 30, 2011 and 2010, respectively	19,921,000		$ 4,000	19,917,000
Stock option activity (in shares)			357,616
Restricted stock activity	2,182,000			2,182,000
Restricted stock activity (in shares)			97,005
Change in fair value of interest rate swap contracts, net of income taxes of $3,610 and $4,171 for six months ended June 30, 2011 and 2010, respectively	6,405,000					6,405,000		6,405,000
Change in fair value of corporate debt securities	910,000					910,000		910,000
Foreign currency translation adjustment	497,000					497,000		497,000
Cumulative-effect of adoption of amendments to ASC 924 regarding jackpot liabilities, net of income taxes of $1,068	2,911,000				2,911,000
Net income (loss)	127,517,000				127,517,000			127,517,000
Comprehensive Income (Loss)								$ 135,329,000
Balance at Jun. 30, 2011	$ 1,938,109,000		$ 783,000	$ 1,469,031,000	$ 468,368,000	$ (73,000)
Balance (in shares) at Jun. 30, 2011		12,275	78,868,643

Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Changes in Shareholders' Equity
Stock option activity, tax benefit	$ 2,058	$ 288
Change in fair value of interest rate swap contracts, income taxes	3,610	$ 4,171
Cumulative effect of adoption of amendments to ASC 924 regarding jackpot liabilities, income taxes	$ 1,068

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating activities
Net income including noncontrolling interests	$ 127,517	$ 43,127
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization	107,388	103,833
Amortization of items charged to interest expense and interest income	6,189	6,494
(Gain) loss on sale of fixed assets	(234)	937
Loss from unconsolidated affiliates	1,923	1,837
Loss on early extinguishment of debt		519
Loss on police services contract termination at Hollywood Casino Aurora		6,624
Deferred income taxes	27,592	(9,394)
Charge for stock-based compensation	12,349	13,053
Impairment losses		30,726
(Increase) decrease, net of businesses acquired
Accounts receivable	(2,431)	(2,323)
Insurance receivable	(709)	14,811
Prepaid expenses and other current assets	42,808	34,085
Other assets	(1,515)	7,552
Increase (decrease), net of businesses acquired
Accounts payable	1,138	1,923
Accrued expenses	(12,531)	(13,021)
Accrued interest	(2,731)	32
Accrued salaries and wages	(7,053)	(10,285)
Gaming, pari-mutuel, property and other taxes	(7,995)	(1,562)
Other current and noncurrent liabilities	5,320	2,694
Other noncurrent tax liabilities	(6,048)	(8,313)
Net cash provided by operating activities	290,977	223,349
Investing activities
Expenditures for property and equipment	(107,250)	(210,987)
Proceeds from sale of property and equipment	610	1,312
Insurance proceeds related to damaged property and equipment		4,821
Investment in joint ventures	(80,725)	(13,550)
Decrease (increase) in cash in escrow	30,000	(37,616)
Cash acquired, net of acquisitions of businesses and licenses	12,585	(19,150)
Net cash used in investing activities	(144,780)	(275,170)
Financing activities
Proceeds from exercise of options	7,695	2,842
Repurchase of common stock		(9,912)
Repurchase of preferred stock		(11,200)
Proceeds from issuance of long-term debt, net of issuance costs	28,670	56,750
Principal payments on long-term debt	(103,095)	(295,923)
Proceeds from insurance financing	892
Payments on insurance financing	(6,817)	(5,938)
Tax benefit from stock options exercised	2,058	288
Net cash used in financing activities	(70,597)	(263,093)
Net increase (decrease) in cash and cash equivalents	75,600	(314,914)
Cash and cash equivalents at beginning of year	246,385	713,118
Cash and cash equivalents at end of period	321,985	398,204
Supplemental disclosure
Interest expense paid	53,313	63,110
Income taxes paid	$ 28,619	$ 28,682

Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Millions	6 Months Ended
	Jun. 30, 2011 USD ($)
Condensed Consolidated Statements of Cash Flows
Increased property and equipment, net	$ 203.3
Total current assets	13.7
Total other assets	2.8
Total current liabilites	$ 17.3

Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2011

Organization and Basis of Presentation

Organization and Basis of Presentation

1. Organization and Basis of Presentation

Penn National Gaming, Inc. (“Penn”) and subsidiaries (collectively, the “Company”) is a diversified, multi-jurisdictional owner and manager of gaming and pari-mutuel properties. As of June 30, 2011, the Company owns, manages, or has ownership interests in twenty-six facilities in the following eighteen jurisdictions: Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The consolidated financial statements include the accounts of Penn and its subsidiaries. Investment in and advances to unconsolidated affiliates that are 50% or less owned are accounted for under the equity method. All significant intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting periods. Actual results could differ from those estimates. For purposes of comparability, certain prior year amounts have been reclassified to conform to the current year presentation.

Operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The notes to the consolidated financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2010 should be read in conjunction with these consolidated financial statements.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Revenue Recognition and Promotional Allowances

Gaming revenue is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs, for chips and “ticket-in, ticket-out” coupons in the customers’ possession, and for accruals related to the anticipated payout of progressive jackpots. Progressive slot machines, which contain base jackpots that increase at a progressive rate based on the number of coins played, are charged to revenue as the amount of the jackpots increase.

Food, beverage and other revenue, including racing revenue, is recognized as services are performed. Racing revenue includes the Company’s share of pari-mutuel wagering on live races after payment of amounts returned as winning wagers, its share of wagering from import and export simulcasting, and its share of wagering from its off-track wagering facilities.

Revenue from the management service contract for Casino Rama is based upon contracted terms and is recognized when services are performed.

Revenues are recognized net of certain sales incentives in accordance with Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 605-50, “Revenue Recognition—Customer Payments and Incentives.” The Company records certain sales incentives and points earned in point-loyalty programs as a reduction of revenue.

The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such promotional allowances is primarily included in food, beverage and other expense. The amounts included in promotional allowances for the three and six months ended June 30, 2011 and 2010 are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Rooms	$	5,528	$	5,990	$	10,739	$	11,960
Food and beverage	25,461		24,931		48,689		51,035
Other	2,433		2,722		4,688		5,324
Total promotional allowances	$	33,422	$	33,643	$	64,116	$	68,319

The estimated cost of providing such complimentary services for the three and six months ended June 30, 2011 and 2010 are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Rooms	$	2,010	$	2,319	$	4,024	$	4,603
Food and beverage	18,645		19,001		36,264		38,195
Other	1,440		1,742		2,794		3,471
Total cost of complimentary services	$	22,095	$	23,062	$	43,082	$	46,269

Earnings Per Share

The Company calculates earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share” (“ASC 260”). Basic EPS is computed by dividing net income applicable to common stock, excluding net income attributable to noncontrolling interests, by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as stock options and unvested restricted shares.

At June 30, 2011, the Company had outstanding 12,275 shares of Series B Redeemable Preferred Stock (the “Preferred Stock”), which the Company determined qualified as a participating security as defined in ASC 260. Under ASC 260, a security is considered a participating security if the security may participate in undistributed earnings with common stock, whether that participation is conditioned upon the occurrence of a specified event or not. In accordance with ASC 260, a company is required to use the two-class method when computing EPS when a company has a security that qualifies as a “participating security.” The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. A participating security is included in the computation of basic EPS using the two-class method. Under the two-class method, basic EPS for the Company’s Common Stock is computed by dividing net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock by the weighted-average common shares outstanding during the period. Diluted EPS for the Company’s Common Stock is computed using the more dilutive of the two-class method or the if-converted method.

The following table sets forth the allocation of net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries for the three and six months ended June 30, 2011 and 2010 under the two-class method:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	75,989	$	9,156	$	127,517	$	45,320
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to preferred stock	14,396		1,729		24,185		8,621
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$	61,593	$	7,427	$	103,332	$	36,699

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the three and six months ended June 30, 2011 and 2010:

	Three Months Ended June 30,		Six Months Ended June 30,
	2011	2010	2011	2010
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	78,387	78,717	78,275	78,641
Assumed conversion of dilutive employee stock-based awards	1,858	800	1,694	773
Assumed conversion of preferred stock	27,278	27,278	27,278	27,504
Diluted weighted-average common shares outstanding	107,523	106,795	107,247	106,918

Reflecting the issuance of the Preferred Stock and the repurchase of 225 shares of Preferred Stock during the year ended December 31, 2010, the Company is required to adjust its diluted weighted-average common shares outstanding for the purpose of calculating diluted EPS as follows: 1) when the price of the Company’s Common Stock is less than $45, the diluted weighted-average common shares outstanding is increased by 27,277,778 shares (regardless of how much the stock price is below $45); 2) when the price of the Company’s Common Stock is between $45 and $67, the diluted weighted-average common shares outstanding is increased by an amount which can be calculated by dividing $1.23 billion (face value) by the current price per share of the Company’s Common Stock, which will result in an increase in the diluted weighted-average common shares outstanding of between 18,320,896 shares and 27,277,778 shares; and 3) when the price of the Company’s Common Stock is above $67, the diluted weighted-average common shares outstanding is increased by 18,320,896 shares (regardless of how much the stock price exceeds $67).

Options to purchase 2,816,053 shares and 2,894,152 shares were outstanding during the three and six months ended June 30, 2011, respectively, but were not included in the computation of diluted EPS because they were antidilutive. Options to purchase 8,463,022 shares and 8,451,707 shares were outstanding during the three and six months ended June 30, 2010, respectively, but were not included in the computation of diluted EPS because they were antidilutive.

The following table presents the calculation of basic and diluted EPS for the Company’s Common Stock:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands, except per share data)
Calculation of basic EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$	61,593	$	7,427	$	103,332	$	36,699
Weighted-average common shares outstanding	78,387		78,717		78,275		78,641
Basic EPS	$	0.79	$	0.09	$	1.32	$	0.47

Calculation of diluted EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	75,989	$	9,156	$	127,517	$	45,320
Diluted weighted-average common shares outstanding	107,523		106,795		107,247		106,918
Diluted EPS	$	0.71	$	0.09	$	1.19	$	0.42

Stock-Based Compensation

The Company accounts for stock compensation under ASC 718, “Compensation-Stock Compensation,” which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. This expense is recognized ratably over the requisite service period following the date of grant.

The fair value for stock options was estimated at the date of grant using the Black-Scholes option-pricing model, which requires management to make certain assumptions. The risk-free interest rate was based on the U.S. Treasury spot rate with a term equal to the expected life assumed at the date of grant. Expected volatility was estimated based on the historical volatility of the Company’s stock price over a period of 5.77 years, in order to match the expected life of the options at the grant date. There is no expected dividend yield since the Company has not paid any cash dividends on its Common Stock since its initial public offering in May 1994 and since the Company intends to retain all of its earnings to finance the development of its business for the foreseeable future. The weighted-average expected life was based on the contractual term of the stock option and expected employee exercise dates, which was based on the historical and expected exercise behavior of the Company’s employees. Forfeitures are estimated at the date of grant based on historical experience. The following are the weighted-average assumptions used in the Black-Scholes option-pricing model at June 30, 2011 and 2010:

Six Months Ended June 30,	2011		2010

Risk-free interest rate	2.04	%	2.00	%
Expected volatility	47.24	%	49.18	%
Dividend yield	—		—
Weighted-average expected life (years)	5.77		5.68
Forfeiture rate	5.00	%	5.00	%

Beginning in the fourth quarter of 2010, the Company issued cash-settled phantom stock unit awards, which vest over a period of five years. Cash-settled phantom stock unit awards entitle employees and directors to receive cash based on the fair value of the Company’s Common Stock on the vesting date. These phantom stock unit awards are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with compensation expense being recognized over the requisite service period in accordance with ASC 718-30 “Compensation—Stock Compensation, Awards Classified as Liabilities.” As of June 30, 2011, there was $7.6 million of total unrecognized compensation cost that will be recognized over the grants remaining vesting period. For the three and six months ended June 30, 2011, the Company recognized $0.6 million and $1.0 million, respectively, of compensation expense associated with these awards.

Additionally, in the first quarter of 2011, the Company issued stock appreciation rights to certain employees, which vest over a period of four years. The Company’s stock appreciation rights are accounted for as liability awards since they will be settled in cash. The fair value of these awards is calculated during each reporting period and estimated using the Black-Scholes option pricing model based on the various inputs discussed previously. As of June 30, 2011, there was $5.6 million of total unrecognized compensation cost that will be recognized over the awards remaining weighted average vesting period. For the three and six months ended June 30, 2011, the Company recognized $0.4 million and $0.7 million, respectively, of compensation expense associated with these awards.

Accounting for Derivatives and Hedging Activities

The Company uses fixed and variable-rate debt to finance its operations. Both funding sources have associated risks and opportunities, such as interest rate exposure, and the Company’s risk management policy permits the use of derivatives to manage this exposure. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. Thus, uses of derivatives are strictly limited to hedging and risk management purposes in connection with managing interest rate exposure. Acceptable derivatives for this purpose include interest rate swap contracts, futures, options, caps, and similar instruments.

When using derivatives, the Company’s intent is to obtain hedge accounting, which is conditional upon satisfying specific documentation and performance criteria. In particular, the underlying hedged item must expose the Company to risks associated with market fluctuations and the instrument used as the hedging derivative must generate offsetting effects in prescribed magnitudes. If these criteria are not met, a change in the market value of the financial instrument and all associated settlements would be recognized as gains or losses in the period of change.

Currently, the Company has a number of interest rate swap contracts in place. These contracts serve to mitigate income volatility for a portion of its variable-rate funding. In effect, these swap contracts synthetically convert the portion of variable-rate debt being hedged to the equivalent of fixed-rate funding. Under the terms of the swap contracts, the Company receives cash flows from the swap contract counterparties to offset the benchmark interest rate component of variable interest payments on the hedged financings, in exchange for paying cash flows based on the swap contracts’ fixed rates. These two respective obligations are net-settled periodically. The Company accounts for these swap contracts as cash flow hedges, which requires determining a division of hedge results deemed effective and deemed ineffective. However, most of the Company’s hedges were designed in such a way so as to perfectly offset specifically-defined interest payments, such that no ineffectiveness has occurred—nor would any ineffectiveness occur, as long as the forecasted cash flows of the designated hedged items and the associated swap contracts remain unchanged. The notional value of the Company’s cash flow hedges totaled $540 million at June 30, 2011.

The fair value of the Company’s interest rate swap contracts is measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of the date of the valuation, subject to a credit adjustment to the LIBOR-based yield curve’s implied discount rates. The credit adjustment reflects the Company’s best estimate as to the Company’s credit quality at June 30, 2011.

Under cash flow hedge accounting, effective derivative results are initially recorded in other comprehensive income (“OCI”) and later reclassified to earnings, coinciding with the income recognition relating to the variable interest payments being hedged (i.e., when the interest expense on the variable-rate liability is recorded in earnings). Any hedge ineffectiveness (which represents the amount by which hedge results exceed the variability in the cash flows of the forecasted transaction due to the risk being hedged) is recorded in current period earnings.

Under cash flow hedge accounting, derivatives are included in the consolidated balance sheets as assets or liabilities at fair value. The interest rate swap contract liabilities are included in accrued interest within the consolidated balance sheets at June 30, 2011 and December 31, 2010.

In addition, the Company had certain derivative instruments that were not designated to qualify for hedge accounting, which expired in May 2011. The periodic change in the mark-to-market of these derivative instruments had been recorded in current period earnings in interest expense in the consolidated statements of income.

Credit risk relating to derivative counterparties is mitigated by using multiple, highly rated counterparties, and the credit quality of each is monitored on an ongoing basis. See Note 8 for additional information related to the Company’s derivatives.

New Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

New Accounting Pronouncements

New Accounting Pronouncements

3. New Accounting Pronouncements

In June 2011, the FASB issued amendments to guidance regarding the presentation of comprehensive income. The amendments eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that comprehensive income be presented in either a single continuous statement or in two separate but consecutive statements. In a single continuous statement, the entity would present the components of net income and total net income, the components of other comprehensive income and a total of other comprehensive income, along with the total of comprehensive income in that statement. In the two-statement approach, the entity would present components of net income and total net income in the statement of net income and a statement of other comprehensive income would immediately follow the statement of net income and include the components of other comprehensive income and a total for other comprehensive income, along with a total for comprehensive income. The amendments also require the entity to present on the face of the financial statements any reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. The amendments do not change the items that must be reported in other comprehensive income, when an item of other comprehensive income must be reclassed to net income or the option to present components of other comprehensive income either net of related tax effects or before related tax effects. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted. The Company is currently evaluating its options on how it will present comprehensive income upon adoption of these amendments.

In May 2011, the FASB issued amendments to existing fair value measurement guidance in order to achieve common requirements for measuring fair value and disclosures in accordance with GAAP and International Financial Reporting Standards. The guidance clarifies how a principal market is determined, addresses the fair value measurement of instruments with offsetting market or counterparty credit risks, addresses the concept of valuation premise and highest and best use, extends the prohibition on blockage factors to all three levels of the fair value hierarchy and requires additional disclosures. The amendments are to be applied prospectively and are effective during interim and annual periods beginning after December 15, 2011. The Company is currently evaluating the requirements of this amendment and has not yet determined its impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued guidance on accruing for jackpot liabilities. The guidance clarifies that an entity should not accrue jackpot liabilities (or portions thereof) before a jackpot is won if the entity can legally avoid paying that jackpot (for example, by removing the gaming machine from the casino floor). Jackpots should be accrued and charged to revenue when an entity has the obligation to pay the jackpot. This guidance applies to both base jackpots and the incremental portion of progressive jackpots. However, the guidance only affected the accounting for base jackpots, as the guidance uses the same principle that is applied by the Company to the incremental portion of progressive jackpots. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. This guidance was applied by recording a cumulative-effect adjustment to opening retained earnings in the period of adoption. The Company adopted the guidance as of January 1, 2011, and as such, recorded a cumulative-effect adjustment, which increased retained earnings by $2.9 million.

Acquisition and Other Recent Business Ventures

6 Months Ended

Jun. 30, 2011

Acquisition and Other Recent Business Ventures

Acquisition and Other Recent Business Ventures

4. Acquisition and Other Recent Business Ventures

M Resort Transaction

On June 1, 2011, following the purchase of all of the outstanding debt of The M Resorts LLC (the “M Resort”) for $230.5 million and the receipt of requisite regulatory approvals, the Company acquired the business in exchange for the debt. The Company purchased all of the outstanding bank and subordinated debt of the M Resort in October 2010 at which time the Company also secured the right to acquire the business of the M Resort in exchange for the property’s outstanding debt obligations. At December 31, 2010, the $230.5 million loan was recorded as a loan receivable within total other assets on the consolidated balance sheet. This non-cash transaction resulted in the removal of the Company’s loan receivable and the preliminary purchase price allocated resulted in an increase to property and equipment, net, total current assets, total other assets, and total current liabilities, by $203.3 million, $13.7 million, $2.8 million, and $17.3 million, respectively based on their estimated fair values as of June 1, 2011. The Company is in the process of finalizing these values and, as such, the allocation of the purchase price is subject to revision.

Opened in March 2009, the M Resort, located approximately ten miles from the Las Vegas strip in Henderson, Nevada, is situated on over 90 acres on the southeast corner of Las Vegas Boulevard and St. Rose Parkway. The resort features over 92,000 square feet of gaming space. M Resort also offers 390 guest rooms and suites, nine restaurants and five destination bars, more than 60,000 square feet of meeting and conference space, a 4,700 space parking facility, a spa and fitness center and a 100,000 square foot events piazza.

Texas Joint Venture

On April 8, 2011, the Company established a joint venture that owns and operates racetracks in Texas. See Note 5 for further discussion.

Rosecroft Acquisition

On February 28, 2011, the Company completed its acquisition of Rosecroft Raceway in Oxon Hill, Maryland following the completion of a bankruptcy auction and approval of the purchase by a U.S. Bankruptcy Court judge. The Company intends to work with the legislature, local officials and Maryland horsemen to develop a financially viable model for operating the track. Rosecroft Raceway, located approximately 13 miles south of Washington, D.C., is situated on approximately 125 acres just outside the Washington I-495 Beltway in Prince George’s county. The Rosecroft facility features a 5/8-mile standardbred racing oval track with a seven race paddock, a 53,000 square foot grandstand building, and a 96,000 square foot three story clubhouse building with dining facilities. The last live racing meet at Rosecroft Raceway was in 2008 and the facility ceased all pari-mutuel operations in June 2010.

Investment In and Advances to Unconsolidated Affiliates

6 Months Ended

Jun. 30, 2011

Investment In and Advances to Unconsolidated Affiliates

Investment In and Advances to Unconsolidated Affiliates

5. Investment In and Advances to Unconsolidated Affiliates

Investment in and advances to unconsolidated affiliates primarily includes the Company’s 50% interest in Freehold Raceway, its 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which is a joint venture with International Speedway Corporation (“International Speedway”), the Company’s 49% interest in Maryland RE & R LLC, a joint venture with MI Developments, Inc. that owns and operates the Maryland Jockey Club, and its 50% joint venture with Maxxam, Inc. (“Maxxam”) that owns and operates racetracks in Texas which is more fully described below.

Texas Joint Venture

On April 8, 2011, following final approval by the Texas Racing Commission, the Company completed its investment in a joint venture with Maxxam that owns and operates the Sam Houston Race Park in Houston, Texas, the Valley Race Park in Harlingen, Texas, and a license for a planned racetrack in Laredo, Texas. Under the terms of the joint venture, the Company secured a 50% interest in the joint venture, which has sole ownership of the above entities including interests in 323 acres at Sam Houston Race Park, 80 acres at Valley Race Park, and an option to purchase 135 acres for the planned racetrack in Laredo, Texas.

Sam Houston Race Park, opened in April 1994, is located in Northwest Houston along Beltway 8 near the intersection of Highway 249. Sam Houston Race Park hosts thoroughbred and quarter horse racing and offers daily simulcast operations, as well as hosts various special events, private parties and meetings, concerts and national touring festivals throughout the year. Valley Race Park, which was opened in 1990 and acquired by Sam Houston Race Park in 2000, is a 91,000 square foot dog racing and simulcasting facility located in Harlingen, Texas.

The Company intends to work collaboratively with Maxxam to strengthen and enhance the existing racetrack operations as well as pursue other opportunities, including the potential for gaming operations at the pari-mutuel facilities, to maximize the overall value of the business. As part of the agreement for the joint venture, the Company agreed to fund, upon the legalization of gaming, a loan to the joint venture for up to $375 million to cover development costs that cannot be financed through third party debt. This loan commitment is in place through December 31, 2015, however it may be extended to December 31, 2016 in order to obtain gaming referendum approval in the event gaming legislation approval has occurred prior to December 31, 2015. If the joint venture elects to utilize the loan, the rates to be paid will be LIBOR plus 800 to 900 basis points for a senior financing and an additional 500 to 600 basis points for a subordinated financing.

The Company determined that the joint venture did not qualify as a variable interest entity (“VIE”) at June 30, 2011. Using the guidance for entities that are not VIEs, the Company determined that it did not have a controlling financial interest in the joint venture at, and for the three months ended June 30, 2011, primarily as it did not have the ability to direct the activities of the joint venture that most significantly impacted the joint venture’s economic performance without the input of Maxxam. Therefore, the Company did not consolidate its investment in the joint venture at, and for the three months ended June 30, 2011.

Kansas Entertainment

Kansas Entertainment is proceeding with its construction of the planned facility. The Company and International Speedway will share equally the cost of developing and constructing the proposed facility. The Company estimates that its share of the project will be approximately $155 million. During the three and six months ended June 30, 2011, the Company funded $11.2 million and $21.4 million, respectively, for capital expenditures and other operating expenses.

Sale of Maryland Jockey Club Interest

On June 16, 2011, the Company announced that it had entered into a definitive agreement to sell its 49% joint venture interest in the Maryland Jockey Club. This transaction closed in late July which will result in a gain of approximately $20 million in the third quarter of 2011.

Property and Equipment

6 Months Ended

Jun. 30, 2011

Property and Equipment

Property and Equipment

6. Property and Equipment

Property and equipment, net, consists of the following:

	June 30,			December 31,
	2011			2010
	(in thousands)

Land and improvements	$	392,725		$	298,482
Building and improvements	1,705,418			1,534,117
Furniture, fixtures, and equipment	993,142			938,443
Leasehold improvements	17,151			17,089
Construction in progress	94,942			106,963
Total property and equipment	3,203,378			2,895,094
Less accumulated depreciation	(1,023,641		)	(929,320		)
Property and equipment, net	$	2,179,737		$	1,965,774

Total property and equipment increased by $308.3 million primarily due to the M Resort transaction that closed on June 1, 2011.

Depreciation expense, for property and equipment, totaled $53.4 million and $105.8 million for the three and six months ended June 30, 2011, respectively, as compared to $50.9 million and $100.4 million for the three and six months ended June 30, 2010, respectively. Interest capitalized in connection with major construction projects was $1.0 million and $1.8 million for the three and six months ended June 30, 2011, respectively, as compared to $1.7 million and $2.8 million for the three and six months ended June 30, 2010, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

In accordance with ASC 350, “Intangibles-Goodwill and Other,” the Company does not amortize goodwill, rather it is tested annually, or more frequently if indicators of impairment exist, for impairment by comparing the fair value of the reporting units to their carrying amount. If the carrying amount of a reporting unit exceeds its fair value in step 1 of the impairment test, then step 2 of the impairment test is performed to determine the implied value of goodwill for that reporting unit. If the implied value of goodwill is less than the goodwill allocated for that reporting unit, an impairment loss is recognized. Additionally, the Company considers its gaming license, racing permit and the majority of its trademark intangible assets as indefinite-life intangible assets that do not require amortization based on the Company’s future expectations to operate its gaming facilities indefinitely as well as the Company’s historical experience in renewing these intangible assets at minimal cost with various state gaming commissions.

A reconciliation of goodwill and accumulated goodwill impairment losses is as follows (in thousands):

Balance at December 31, 2010:
Goodwill	$	2,019,613
Accumulated goodwill impairment losses	(833,857		)
Goodwill, net	$	1,185,756
Other	(2,699		)
Balance at June 30, 2011:
Goodwill	$	2,016,914
Accumulated goodwill impairment losses	(833,857		)
Goodwill, net	$	1,183,057

The table below presents the gross carrying value, accumulated amortization, and net book value of each major class of intangible asset at June 30, 2011 and December 31, 2010:

	June 30, 2011						December 31, 2010
	(in thousands)
	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Indefinite-life intangible assets	$	417,934	$	—	$	417,934	$	412,686	$	—	$	412,686
Other intangible assets	49,726		48,737		989		49,600		47,134		2,466
Total	$	467,660	$	48,737	$	418,923	$	462,286	$	47,134	$	415,152

The Company’s intangible asset amortization expense was $0.8 million and $1.6 million for the three and six months ended June 30, 2011, respectively, as compared to $1.7 million and $3.4 million for the three and six months ended June 30, 2010, respectively.

The following table presents expected intangible asset amortization expense based on existing intangible assets at June 30, 2011 (in thousands):

Remainder of 2011	$	540
2012	253
2013	54
2014	54
2015	35
Thereafter	53
Total	$	989

The Company’s remaining goodwill and other intangible assets by reporting unit at June 30, 2011 is shown below (in thousands):

Reporting Unit	Remaining Goodwill and other intangible assets at June 30, 2011
Hollywood Casino Lawrenceburg	$	362,491
Hollywood Casino Joliet	212,857
Hollywood Casino Aurora	207,207
Argosy Casino Riverside	159,296
Black Gold Casino at Zia Park	146,096
Argosy Casino Alton	135,511
Argosy Casino Sioux City	92,795
Hollywood Casino Baton Rouge	75,521
Others	210,206
Total	$	1,601,980

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Long-term Debt and Derivatives

6 Months Ended

Jun. 30, 2011

Long-term Debt and Derivatives

Long-term Debt and Derivatives

8. Long-term Debt and Derivatives

Long-term debt, net of current maturities, is as follows:

	June 30, 2011			December 31, 2010
	(in thousands)

Senior secured credit facility due October 2012	$	1,518,125		$	1,589,125
$250 million 6 3/4% senior subordinated notes due March 2015	250,000			250,000
$325 million 8 ¾% senior subordinated notes due August 2019	325,000			325,000
Other long-term obligations	1,890			3,782
Capital leases	3,121			3,216
	2,098,136			2,171,123
Less current maturities of long-term debt	(3,052		)	(357,927		)
	$	2,095,084		$	1,813,196

The following is a schedule of future minimum repayments of long-term debt as of June 30, 2011 (in thousands):

Within one year	$	3,052
1-3 years	165
3-5 years	250,193
Over 5 years	1,844,726
Total minimum payments	$	2,098,136

Senior Secured Credit Facility

The Company’s senior secured credit facility had an outstanding balance of $1,518.1 million at June 30, 2011, consisting of a term loan of $1,518.1 million. Additionally, at June 30, 2011, the Company was contingently obligated under letters of credit issued pursuant to the senior secured credit facility with face amounts aggregating $26.5 million, resulting in $614.1 million of available borrowing capacity as of June 30, 2011. The term loan had a quarterly principal payment of $354.9 million in December 2011, followed by payments of $387.8 million in March 2012, June 2012 and October 2012. The revolving credit facility was scheduled to mature on July 3, 2012.

In July 2011, the Company entered into a new $2.15 billion senior secured credit facility, which is comprised of a $700 million revolving credit facility that will mature in July 2016, a $700 million variable rate Term Loan A due in July 2016 and a $750 million variable rate Term Loan B due in July 2018. The Company utilized the proceeds of the two term loan borrowings and cash on hand to retire its existing senior secured credit facility obligation and pay transaction costs and accrued interest and fees on the retired debt. Due to the closing of this transaction, the Company has classified the outstanding balance of its senior secured credit facility at June 30, 2011 as a long-term obligation in accordance with the guidance in ASC 470-10 “Debt-Intent and Ability to Refinance on a Long-Term Basis.” See Note 15 for further details.

During the six months ended June 30, 2011, the senior secured credit facility amount outstanding decreased by $71.0 million primarily due to repayments on the revolving credit facility using available cash.

6 3/4% Senior Subordinated Notes

In July 2011, the Company announced its intention to redeem all of its $250 million senior subordinated notes due March 2015. See Note 15 for further details.

Covenants

The Company’s senior secured credit facility and $325 million 83/4% and $250 million 63/4% senior subordinated notes require it, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests, including fixed charge coverage, senior leverage and total leverage ratios. In addition, the Company’s senior secured credit facility and $325 million 83/4% and $250 million 63/4% senior subordinated notes restrict, among other things, the Company’s ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, make acquisitions, engage in mergers or consolidations, make capital expenditures, and otherwise restricts corporate activities.

At June 30, 2011, the Company was in compliance with all required covenants.

Interest Rate Swap Contracts

In accordance with the terms of its senior secured credit facility that was outstanding at June 30, 2011, the Company was required to enter into fixed-rate debt or interest rate swap agreements in an amount equal to 50% of the Company’s consolidated indebtedness, excluding the revolving credit facility, within 100 days of the closing date of the senior secured credit facility.

The effect of derivative instruments on the consolidated statement of income for the three months ended June 30, 2011 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(332	)	Interest expense	$	(3,625	)	None	$	—
Total	$	(332	)		$	(3,625	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(1	)
Total		$	(1	)

The effect of derivative instruments on the consolidated statement of income for the six months ended June 30, 2011 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(672	)	Interest expense	$	(8,173	)	None	$	—
Total	$	(672	)		$	(8,173	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(4	)
Total		$	(4	)

The effect of derivative instruments on the consolidated statement of income for the three months ended June 30, 2010 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(2,792	)	Interest expense	$	(6,364	)	None	$	—
Total	$	(2,792	)		$	(6,364	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(4	)
Total		$	(4	)

The effect of derivative instruments on the consolidated statement of income for the six months ended June 30, 2010 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(10,178	)	Interest expense	$	(12,859	)	None	$	—
Total	$	(10,178	)		$	(12,859	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(38	)
Total		$	(38	)

In addition, during the three and six months ended June 30, 2011, the Company amortized $0.6 million and $2.5 million, respectively, in OCI related to the derivatives that were de-designated as hedging instruments under ASC 815, “Derivatives and Hedging,” as compared to $4.2 million and $8.5 million for the three and six months ended June 30, 2010, respectively.

In the coming twelve months, the Company anticipates that losses of approximately $4.6 million will be reclassified from OCI to earnings, as part of interest expense. As this amount represents effective hedge results, a comparable offsetting amount of incrementally lower interest expense will be realized in connection with the variable funding being hedged.

The following table sets forth the fair value of the interest rate swap contract liabilities included in accrued interest within the consolidated balance sheets at June 30, 2011 and December 31, 2010:

	June 30, 2011			December 31, 2010
	(in thousands)
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Interest rate swap contracts	Accrued interest	$	4,645	Accrued interest	$	13,034
Total derivatives designated as hedging instruments		$	4,645		$	13,034

Derivatives not designated as hedging instruments
Interest rate swap contracts	Accrued interest	$	—	Accrued interest	$	3,712
Total derivatives not designated as hedging instruments		$	—		$	3,712

Total derivatives		$	4,645		$	16,746

Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

9. Income Taxes

A reconciliation of the liability for unrecognized tax benefits is as follows:

	Noncurrent tax liabilities
	(in thousands)
Balance at January 1, 2011	$	36,846
Additions based on current year positions	661
Reductions based on prior year positions	(1,397		)
Decreases due to settlements and/or reduction in liabilities	(7,317		)
Currency translation adjustments	1,680
Balance at June 30, 2011	$	30,473

The decrease in the Company’s liability for unrecognized tax benefits during the six months ended June 30, 2011 was primarily due to the reversal of previously recorded unrecognized tax benefit reserves in the second quarter of 2011 for years that either the statue of limitations has lapsed in 2011 or that have been favorably settled.

The Company’s effective tax rate (income taxes as a percentage of income from operations before income taxes) decreased to 33.5% and 37.5% for the three and six months ended June 30, 2011, respectively, as compared to 64.7% and 43.1% for the three and six months ended June 30, 2010, respectively, primarily due to the reversal of previously recorded unrecognized tax benefit reserves in the second quarter of 2011 for years that either the statue of limitations has lapsed in 2011 or that have been favorably settled plus the impairment charge in the second quarter of 2010 on the Company’s Columbus property which had an unfavorable impact to the Company’s effective rate by lowering income from operations before income taxes.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

Litigation

The Company is subject to various legal and administrative proceedings relating to personal injuries, employment matters, commercial transactions and other matters arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverse effect on the Company’s consolidated financial position or results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate the risks of such proceedings. However, such proceedings can be costly, time consuming and unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings may not materially impact the Company’s consolidated financial condition or results of operations. Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters.

The following proceedings could result in costs, settlements, damages, or rulings that materially impact the Company’s consolidated financial condition or operating results. In each instance, the Company believes that it has meritorious defenses, claims and/or counter-claims, and intends to vigorously defend itself or pursue its claim.

The Illinois Legislature passed into law House Bill 1918, effective May 26, 2006, which singled out four of the nine Illinois casinos, including the Company’s Hollywood Casino Joliet and Hollywood Casino Aurora, for a 3% tax surcharge to subsidize local horse racing interests. On May 30, 2006, Hollywood Casino Joliet and Hollywood Casino Aurora joined with the two other riverboats affected by the law, Harrah’s Joliet and the Grand Victoria Casino in Elgin (collectively, the “Four Casinos”), and filed suit in the Circuit Court of the Twelfth Judicial District in Will County, Illinois (the “Court”), asking the Court to declare the law unconstitutional. Hollywood Casino Joliet and Hollywood Casino Aurora began paying the 3% tax surcharge into a protest fund which accrues interest during the pendency of the lawsuit. In two orders dated March 29, 2007 and April 20, 2007, the Court declared the law unconstitutional under the Uniformity Clause of the Illinois Constitution and enjoined the collection of this tax surcharge. The State of Illinois requested, and was granted, a stay of this ruling. As a result, Hollywood Casino Joliet and Hollywood Casino Aurora continued paying the 3% tax surcharge into the protest fund until May 25, 2008, when the 3% tax surcharge expired. The State of Illinois appealed the ruling to the Illinois Supreme Court. On June 5, 2008, the Illinois Supreme Court reversed the trial court’s ruling and issued a decision upholding the constitutionality of the 3% tax surcharge. On January 21, 2009, the Four Casinos filed a petition for certiorari, requesting the U.S. Supreme Court to hear the case. Seven amicus curiae briefs supporting the plaintiffs’ request were also filed. On June 8, 2009, the U.S. Supreme Court decided not to hear the case. On June 10, 2009, the Four Casinos filed a petition with the Court to open the judgment based on new evidence that came to light during the investigation of former Illinois Governor Rod Blagojevich that the 2006 law was procured by corruption. On August 17, 2009, the Court dismissed the Four Casinos’ petition to reopen the case, and the Four Casinos decided not to pursue an appeal of the dismissal. The monies paid into the protest fund have been transferred by the State of Illinois to the racetracks. However, the racetracks have been temporarily restrained from disbursing any funds pursuant to an order of the Seventh Circuit Court of Appeals issued in connection with the lawsuit described below.

On December 15, 2008, former Illinois Governor Rod Blagojevich signed Public Act No. 95-1008 requiring the Four Casinos to continue paying the 3% tax surcharge to subsidize Illinois horse racing interests. On January 8, 2009, the Four Casinos filed suit in the Court, asking it to declare the law unconstitutional. The 3% tax surcharge being paid pursuant to Public Act No. 95-1008 was being paid into a protest fund where it accrued interest. The defendants filed a motion to dismiss, which was granted on August 17, 2009. The Four Casinos appealed the dismissal and filed motions to keep the payments in the protest fund while the appeal is being litigated. The motion to keep the monies in the protest fund was denied and the funds were released to the racetracks, however, the funds are subject to the order issued by the Seventh Circuit Court of Appeals described below. On January 27, 2011, the Illinois appellate court affirmed the trial court’s dismissal of this case. Hollywood Casino Joliet and Hollywood Casino Aurora asked the Illinois Supreme Court to hear an appeal of this dismissal and this request was denied. The payment of the 3% tax surcharge under the 2008 statute ended on July 14, 2011 with the opening of the new casino in Des Plaines, Illinois. See Note 15 for further details.

On June 12, 2009, the Four Casinos filed a lawsuit in Illinois Federal Court naming former Illinois Governor Rod Blagojevich, his campaign fund, racetrack owner John Johnston, and his two racetracks as defendants alleging a civil conspiracy in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1962(c),(d) (“RICO”), based on an illegal scheme to secure the enactment of the 3% tax surcharge legislation in exchange for the payment of money by Johnston and entities controlled by him. The Four Casinos also seek to impose a constructive trust over all funds paid under the tax surcharge, and therefore all of the Illinois racetracks are named as parties to the lawsuit. The defendants in the RICO case filed motions to dismiss. On December 7, 2009, the district court denied the motions to dismiss the RICO count, but it granted the motion to dismiss the constructive trust count, stating that it did not have jurisdiction in this case to impose the constructive trust. The Four Casinos appealed this dismissal to the Seventh Circuit Court of Appeals, which affirmed the dismissal in an en banc opinion. The appellate court has ordered that any monies disbursed to the tracks be maintained by the tracks in a constructive trust until the appeal has been decided. The Four Casinos have requested the U.S. Supreme Court to continue the temporary restraining order to keep the monies in a constructive trust until it decides whether to grant a petition for certiorari. Since the passing of House Bill 1918 into law, Hollywood Casino Joliet and Hollywood Casino Aurora have recognized approximately $54.8 million in expense as a result of the 3% tax surcharge, including $2.6 million and $5.1 million during the three and six months ended June 30, 2011, respectively. The 3% tax surcharge is included in gaming expense within the consolidated statements of income.

On July 16, 2008, the Company was served with a purported class action lawsuit brought by plaintiffs seeking to represent a class of shareholders who purchased shares of the Company’s Common Stock between March 20, 2008 and July 2, 2008. The lawsuit alleges that the Company’s disclosure practices relative to the proposed transaction with Fortress Investment Group LLC and Centerbridge Partners, L.P. and the eventual termination of that transaction were misleading and deficient in violation of the Securities Exchange Act of 1934. The complaint, which seeks class certification and unspecified damages, was filed in federal court in Maryland. The complaint was amended, among other things, to add three new named plaintiffs and to name Peter M. Carlino, Chairman and Chief Executive Officer, and William J. Clifford, Senior Vice President and Chief Financial Officer, as additional defendants. The Company filed a motion to dismiss the complaint in November 2008, and the court granted the motion and dismissed the complaint with prejudice. The plaintiffs filed a motion for reconsideration, which was denied on October 21, 2009. The plaintiffs subsequently appealed the dismissal to the Fourth Circuit Court of Appeals and an oral argument was heard on October 26, 2010. On March 14, 2011, the Fourth Circuit Court of Appeals affirmed the decision of the lower court. The plaintiffs have requested the U.S. Supreme Court to consider an appeal of the decision.

On September 11, 2008, the Board of County Commissioners of Cherokee County, Kansas (the “County”) filed suit against Kansas Penn Gaming, LLC (“KPG,” a wholly-owned subsidiary of Penn created to pursue a development project in Cherokee County, Kansas) and the Company in the District Court of Shawnee County, Kansas. The petition alleges that KPG breached its pre-development agreement with the County when KPG withdrew its application to manage a lottery gaming facility in Cherokee County and currently seeks in excess of $50 million in damages. In connection with their petition, the County obtained an ex-parte order attaching the $25 million privilege fee paid to the Kansas Lottery Commission in conjunction with the gaming application for the Cherokee County zone. The defendants have filed motions to dissolve and reduce the attachment. Those motions were denied. Discovery is now underway.

On September 23, 2008, KPG filed an action against HV Properties of Kansas, LLC (“HV”) in the U.S. District Court for the District of Kansas seeking a declaratory judgment from the U.S. District Court finding that KPG has no further obligations to HV under a Real Estate Sale Contract (the “Contract”) that KPG and HV entered into on September 6, 2007, and that KPG properly terminated this Contract under the terms of the Repurchase Agreement entered into between the parties effective September 28, 2007. HV filed a counterclaim claiming KPG breached the Contract, and seeks $37.5 million in damages. On October 7, 2008, HV filed suit against the Company claiming the Company is liable to HV for KPG’s alleged breach based on a Guaranty Agreement signed by the Company. Both cases were consolidated. Following extensive discovery and briefings, on July 23, 2010, the court granted KPG’s motion for summary judgment and dismissed HV’s claim. KPG filed a motion requesting reimbursement of the attorneys’ fees and costs incurred in litigating this case pursuant to the terms of the Contract and was awarded approximately $0.9 million. HV is appealing both rulings of the district court.

On March 11, 2011, CD Gaming Ventures, LLC (“CD Gaming”), a wholly-owned subsidiary of the Company and developer of the Columbus casino, filed suit in U.S. District Court against the City of Columbus (the “City”), Columbus officials, Franklin County and County officials. The lawsuit alleged that the City, Franklin County and various city and county officials violated the Company’s rights under the U.S. and Ohio Constitutions, principally by removing preexisting sewer and water service in an effort to force annexation of the constitutionally-authorized casino site into the City. CD Gaming asked the court for an injunction preventing the City and the county from denying water and sewer service to the casino site and also sought monetary damages. On May 24, 2011, the City and CD Gaming announced they had reached a contingent agreement, subject to final documentation, that would result in the annexation of the casino site into the City in exchange for water and sewer service and other considerations. The agreement was conditioned, among other things, on the sale of real estate previously purchased by the Company in downtown Columbus for $11 million and an acceptable settlement agreement with certain affiliates of the Columbus Dispatch. A sale agreement for the real estate in downtown Columbus has been executed and is scheduled to close on August 23, 2011 and a release and settlement agreement has now been finalized with certain affiliates of the Columbus Dispatch.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Subsidiary Guarantors

6 Months Ended

Jun. 30, 2011

Subsidiary Guarantors.

Subsidiary Guarantors

11. Subsidiary Guarantors

Under the terms of the senior secured credit facility, many of Penn’s subsidiaries are guarantors under the agreement. Each of the subsidiary guarantors is directly or indirectly 100% owned by Penn. In addition, the guarantees provided by such subsidiaries under the terms of the senior secured credit facility are full and unconditional, joint and several. There are no significant restrictions within the senior secured credit facility on the Company’s ability to obtain funds from its subsidiaries by dividend or loan. However, in certain jurisdictions, the gaming authorities may impose restrictions pursuant to the authority granted to them with regard to Penn’s ability to obtain funds from its subsidiaries.

Condensed consolidating balance sheets at June 30, 2011 and December 31, 2010 and condensed consolidating statements of income for the three and six months ended June 30, 2011 and 2010, and condensed consolidating statements of cash flows for the six months ended June 30, 2011 and 2010 for Penn, the subsidiary guarantors of the senior secured credit facility and the subsidiary non-guarantors are presented below.

The Company’s $250 million 63/4% senior subordinated notes and $325 million 83/4% senior subordinated notes are not guaranteed by the Company’s subsidiaries.

	Penn			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Senior Secured Credit Facility
At June 30, 2011
Condensed Consolidating Balance Sheet
Total current assets	$	151,664		$	293,513		$	41,027		$	(719	)	$	485,485
Property and equipment, net	15,226			1,937,696			226,815			—			2,179,737
Total other assets	3,851,307			4,956,449			240,403			(7,165,913		)	1,882,246
Total assets	$	4,018,197		$	7,187,658		$	508,245		$	(7,166,632	)	$	4,547,468
Total current liabilities	$	13,365		$	270,230		$	26,139		$	(717	)	$	309,017
Total long-term liabilities	2,066,724			3,149,356			32,248			(2,947,986		)	2,300,342
Total shareholders’ equity	1,938,108			3,768,072			449,858			(4,217,929		)	1,938,109
Total liabilities and shareholders’ equity	$	4,018,197		$	7,187,658		$	508,245		$	(7,166,632	)	$	4,547,468
Three Months Ended June 30, 2011
Condensed Consolidating Statement of Income
Net revenues	$	—		$	648,907		$	38,972		$	—		$	687,879
Total operating expenses	25,294			486,304			35,689			—			547,287
(Loss) income from operations	(25,294		)	162,603			3,283			—			140,592
Other income (expenses)	18,275			(44,243		)	(315		)	—			(26,283		)
(Loss) income from operations before income taxes	(7,019		)	118,360			2,968			—			114,309
Taxes on income	(13,421		)	50,463			1,278			—			38,320
Net income	$	6,402		$	67,897		$	1,690		$	—		$	75,989
Six Months Ended June 30, 2011
Condensed Consolidating Statement of Income
Net revenues	$	—		$	1,277,896		$	77,006		$	—		$	1,354,902
Total operating expenses	51,307			968,545			71,723			—			1,091,575
(Loss) income from operations	(51,307		)	309,351			5,283			—			263,327
Other income (expenses)	27,181			(83,344		)	(3,090		)	—			(59,253		)
(Loss) income from operations before income taxes	(24,126		)	226,007			2,193			—			204,074
Taxes on income	(22,798		)	97,803			1,552			—			76,557
Net (loss) income	(1,328		)	128,204			641			0			127,517
Six Months Ended June 30, 2011
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities	$	199,268		$	9,620		$	82,089		$	—		$	290,977
Net cash used in investing activities	(1,322		)	(2,373		)	(141,085		)	—			(144,780		)
Net cash (used in) provided by financing activities	(69,335		)	(2,048		)	786			—			(70,597		)
Net increase (decrease) in cash and cash equivalents	128,611			5,199			(58,210		)	—			75,600
Cash and cash equivalents at beginning of year	6,276			157,992			82,117			—			246,385
Cash and cash equivalents at end of period	$	134,887		$	163,191		$	23,907		$	—		$	321,985

	Penn			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Senior Secured Credit Facility
At December 31, 2010
Condensed Consolidating Balance Sheet
Total current assets	$	31,422		$	261,768		$	131,204		$	41,559		$	465,953
Property and equipment, net	15,328			1,775,913			174,533			—			1,965,774
Total other assets	3,848,412			5,042,516			167,466			(7,027,242		)	2,031,152
Total assets	$	3,895,162		$	7,080,197		$	473,203		$	(6,985,683	)	$	4,462,879
Total current liabilities	$	355,018		$	293,588		$	1,370		$	41,553		$	691,529
Total long-term liabilities	1,762,379			3,159,736			45,024			(2,973,555		)	1,993,584
Total shareholders’ equity	1,777,765			3,626,873			426,809			(4,053,681		)	1,777,766
Total liabilities and shareholders’ equity	$	3,895,162		$	7,080,197		$	473,203		$	(6,985,683	)	$	4,462,879
Three Months Ended June 30, 2010
Condensed Consolidating Statement of Income
Net revenues	$	—		$	590,706		$	7,605		$	—		$	598,311
Total operating expenses	21,466			484,084			41,050			—			546,600
(Loss) income from operations	(21,466		)	106,622			(33,445		)	—			51,711
Other income (expenses)	34,917			(66,695		)	(159		)	—			(31,937		)
Income (loss) from operations before income taxes	13,451			39,927			(33,604		)	—			19,774
Taxes on income	(8,046		)	32,154			(11,306		)	—			12,802
Net income (loss) including noncontrolling interests	21,497			7,773			(22,298		)	—			6,972
Less: Net loss attributable to noncontrolling interests	—			—			(2,184		)	—			(2,184		)
Net income (loss) attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	21,497		$	7,773		$	(20,114	)	$	—		$	9,156
Six Months Ended June 30, 2010
Condensed Consolidating Statement of Income
Net revenues	$	—		$	1,176,084		$	14,550		$	—		$	1,190,634
Total operating expenses	44,344			954,786			47,442			—			1,046,572
(Loss) income from operations	(44,344		)	221,298			(32,892		)	—			144,062
Other income (expenses)	46,323			(113,567		)	(988		)	—			(68,232		)
Income (loss) from operations before income taxes	1,979			107,731			(33,880		)	—			75,830
Taxes on income	(17,948		)	65,827			(15,176		)	—			32,703
Net income (loss) including noncontrolling interests	19,927			41,904			(18,704		)	—			43,127
Less: Net loss attributable to noncontrolling interests	—			—			(2,193		)	—			(2,193		)
Net income (loss) attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	19,927		$	41,904		$	(16,511	)	$	—		$	45,320
Six Months Ended June 30, 2010
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	$	272,657		$	192,059		$	(241,367	)	$	—		$	223,349
Net cash used in investing activities	(1,316		)	(199,610		)	(74,244		)	—			(275,170		)
Net cash used in financing activities	(261,554		)	(1,539		)	—			—			(263,093		)
Net increase (decrease) in cash and cash equivalents	9,787			(9,090		)	(315,611		)	—			(314,914		)
Cash and cash equivalents at beginning of year	6,385			145,519			561,214			—			713,118
Cash and cash equivalents at end of period	$	16,172		$	136,429		$	245,603		$	—		$	398,204

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments

Fair Value of Financial Instruments

12. Fair Value of Financial Instruments

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate:

Cash and Cash Equivalents

The fair value of the Company’s cash and cash equivalents approximates the carrying value of the Company’s cash and cash equivalents, due to the short maturity of the cash equivalents.

Investment in Corporate Debt Securities

The fair value of the investment in corporate debt securities is estimated based on quoted prices in active markets for identical investments. The investment in corporate debt securities is measured at fair value on a recurring basis.

Loan Receivable

On June 1, 2011, following the purchase of all of the outstanding debt of the M Resort for $230.5 million and the receipt of requisite regulatory approvals, the Company acquired the business in exchange for the debt. The Company purchased all of the outstanding bank and subordinated debt of the M Resort in October 2010 at which time the Company also secured the right to acquire the business of the M Resort in exchange for the property’s outstanding debt obligations. At December 31, 2010, the $230.5 million loan was recorded as a loan receivable within total other assets on the consolidated balance sheet. See Note 4 for further information.

Long-term Debt

The fair value of the Company’s senior secured credit facility approximates its carrying value, as it is variable-rate debt. The fair value of the Company’s senior subordinated notes is estimated based on quoted prices in active markets for identical instruments. The fair value of the Company’s other long-term obligations approximates its carrying value.

Interest Rate Swap Contracts

The estimated fair values of the Company’s financial instruments are as follows (in thousands):

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	321,985	$	321,985	$	246,385	$	246,385
Investment in corporate debt securities	6,720		6,720		5,828		5,828
Loan receivable	—		—		230,500		230,500
Financial liabilities:
Long-term debt
Senior secured credit facility	1,518,125		1,518,125		1,589,125		1,589,125
Senior subordinated notes	575,000		604,375		575,000		612,875
Other long-term obligations	1,890		1,890		3,782		3,782
Interest rate swap contracts	4,645		4,645		16,746		16,746

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
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-Name Accounting Standards Codification
-Topic 825
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
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-Section 50
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements.

Fair Value Measurements

13. Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below:

· Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

· Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals.

· Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy.

The following tables set forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the consolidated balance sheets at June 30, 2011 and December 31, 2010 (in thousands):

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2011 Total
Assets:
Investment in corporate debt securities	Other assets	$	6,720	$	—	$	—	$	6,720

Liabilities:
Interest rate swap contracts	Accrued interest	—		4,645		—		4,645

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2010 Total
Assets:
Investment in corporate debt securities	Other assets	$	5,828	$	—	$	—	$	5,828

Liabilities:
Interest rate swap contracts	Accrued interest	—		16,746		—		16,746

The valuation technique used to measure the fair value of the investment in corporate debt securities and interest rate swap contracts was the market approach. See Note 12 for a description of the inputs used in calculating the fair value measurements of investment in corporate debt securities and interest rate swap contracts. Although the Company has determined that the majority of the inputs used to value its interest rate swap contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2011, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its interest rate swap contracts and has determined that the credit valuation adjustments are not significant to the overall valuation. As a result, the Company has determined that its interest rate swap contracts are classified in Level 2 of the fair value hierarchy.

Certain long-lived assets are measured at fair value on a non-recurring basis and are not included in the previous tables. The amounts below represent the assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2010 that are still held on the consolidated balance sheet (in thousands):

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2011 Total		Total Reduction in Fair Value Recorded at June 30, 2010
Assets:
Long-lived assets	Other assets	$	—	$	17,310	$	—	$	17,310	$	(30,726	)
										$	(30,726	)

In conjunction with the voters determining that the Company’s casino in Columbus, Ohio will be located at the site of the former Delphi Automotive plant in Columbus’s West Side, the Company recorded a pre-tax impairment charge of $30.5 million during the three and six months ended June 30, 2010 for the parcel of land that the Company had purchased in Columbus’s Arena District, as the asset was reclassified as held for sale at June 30, 2010. Additionally, in conjunction with the opening of the new casino riverboat at Hollywood Casino Lawrenceburg, the Company recorded a pre-tax impairment charge of $0.2 million for the six months ended June 30, 2010.

The valuation technique used to measure the long-lived assets was the market approach. For the land held for sale in Columbus, Ohio, the Company engaged a qualified external real estate appraiser to assist in the valuation, which was based on the sales prices of properties with similar characteristics to the Company’s property in the Columbus Arena District.

- Definition

Tabular disclosure of the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods. Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References

+ Details

Insurance Recoveries and Deductibles

6 Months Ended

Jun. 30, 2011

Insurance Recoveries and Deductibles

Insurance Recoveries and Deductibles

14. Insurance Recoveries and Deductibles

Hollywood Casino Joliet Fire

On March 20, 2009, the Company’s Hollywood Casino Joliet, which was undergoing a $55 million renovation, was closed following a fire that started in the land-based pavilion at the facility. All customers and employees were successfully evacuated, and the fire was contained on the land-side of the property before it could spread to the adjacent casino barge. On June 25, 2009, the casino barge was reopened with temporary land-based facilities, and the Company began construction of a new land-based pavilion. In December 2010, the first phase of the new permanent land-based pavilion was opened to the public and in January 2011 the final phase, including a sports bar, was completed.

At the time of the fire, the Company carried a builders’ risk insurance policy for the on-going renovations with a policy limit of $57 million, inclusive of $14 million for delay in completion and $43 million for property damage. The builders’ risk insurance policy included a $50,000 property damage deductible and a 30-day delay in completion deductible for the peril of fire. In addition, the Company carried comprehensive business interruption and property damage insurance for the operational components of Hollywood Casino Joliet with an overall limit of $228 million. The operational insurance policy included a $2.5 million property damage deductible and a 48-hour business interruption deductible for the peril of fire.

To date, the Company has received $81.2 million in insurance proceeds related to the fire at Hollywood Casino Joliet, with $16.9 million and $18.6 million received during the three and six months ended June 30, 2011, respectively. As the insurance recovery amount exceeded the net book value of assets believed to be damaged, destroyed or abandoned and other costs incurred as a result of the fire at Hollywood Casino Joliet in 2010, the Company recorded a pre-tax gain of $16.8 million and $18.5 million during the three and six months ended June 30, 2011, respectively. During the second quarter of 2011, the insurance claim for the fire at Hollywood Casino Joliet was settled and as such no further proceeds will be received.

Hollywood Casino Tunica Flood

On May 1, 2011, Hollywood Casino Tunica was forced to close as a result of flooding by the Mississippi River. Due to the flooding, access to the property was temporarily cut off and the property sustained minor damage. The property reopened on May 25, 2011.

At the time of the flood, the Company carried property insurance coverage with a flood limit of $300 million for both property damage and business interruption applicable to this event. This coverage included a $5 million property damage and two day business interruption deductible for the peril of flood. During the three and six months ended June 30, 2011, the Company recorded a $5.2 million pre-tax loss for the insurance deductibles for property damage and business interruption.

Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

Subsequent Events

15. Subsequent Events

On July 14, 2011, the Company entered into a new $2.15 billion senior secured credit facility, which is comprised of a $700 million revolving credit facility that will mature in July 2016, a $700 million variable rate Term Loan A due in July 2016 and a $750 million variable rate Term Loan B due in July 2018. The interest rates payable on the facilities are based on the leverage ratios of the Company as defined in the debt agreements, however, based on current borrowing levels, the Company will pay LIBOR plus 175 basis points on the revolver and Term Loan A and LIBOR plus 275 basis points on Term Loan B (subject to a 1% LIBOR floor). The Company utilized the proceeds of the two term loan borrowings and cash on hand to retire its existing senior secured credit facility obligation and pay transaction costs and accrued interest and fees on the retired debt. In addition, in July 2011, the Company announced its intention to redeem all of its $250 million senior subordinated notes that will be completed in the third quarter. The redemption price is $1,022.50 per $1,000 principal amount, plus accrued and unpaid interest. The Company intends to fund the redemption of the $250 million senior subordinated notes from its new $700 million revolving credit facility. The Company anticipates recording a debt extinguishment loss of approximately $18 million in the third quarter of 2011 related to debt issuance costs write-offs and the call premium on the $250 million senior subordinated notes. However, the Company also anticipates lower levels of interest expense prospectively on its current borrowing levels due to the current low interest rate environment.

On July 18, 2011, the tenth licensed casino in Illinois opened in the city of Des Plaines. As previously disclosed in our Form 10-K for the year ended December 31, 2010, this facility is a new source of competition for our Hollywood Casino Joliet and Hollywood Casino Aurora properties and is anticipated to have a negative impact on these properties’ financial results. However, the 3% tax surcharge Hollywood Casino Joliet and Hollywood Casino Aurora have had to pay to subsidize local racing horse interests is no longer required to be paid as the new facility is now open. These two properties paid a 3% tax surcharge of $2.6 million and $5.1 million during the three and six months ended June 30, 2011, respectively.

In July 2011, the Company entered into a new interim agreement with the Ontario Lottery and Gaming Corporation (“OLGC”) for the operation of the Casino Rama facility through March 31, 2012. The earlier operating agreement was due to expire on August 1, 2011. The OLGC is currently in the process of evaluating bids on a new five year operating contract for the facility (with bids required to include operating fees that do not exceed $5 million per year).

As discussed in Note 5, the Company finalized an agreement to sell its joint venture interest in the Maryland Jockey Club. This transaction will result in a gain of approximately $20 million in the third quarter of 2011.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies

Revenue Recognition and Promotional Allowances

Revenue from the management service contract for Casino Rama is based upon contracted terms and is recognized when services are performed.

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Rooms	$	5,528	$	5,990	$	10,739	$	11,960
Food and beverage	25,461		24,931		48,689		51,035
Other	2,433		2,722		4,688		5,324
Total promotional allowances	$	33,422	$	33,643	$	64,116	$	68,319

The estimated cost of providing such complimentary services for the three and six months ended June 30, 2011 and 2010 are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Rooms	$	2,010	$	2,319	$	4,024	$	4,603
Food and beverage	18,645		19,001		36,264		38,195
Other	1,440		1,742		2,794		3,471
Total cost of complimentary services	$	22,095	$	23,062	$	43,082	$	46,269

Earnings Per Share

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	75,989	$	9,156	$	127,517	$	45,320
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to preferred stock	14,396		1,729		24,185		8,621
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$	61,593	$	7,427	$	103,332	$	36,699

	Three Months Ended June 30,		Six Months Ended June 30,
	2011	2010	2011	2010
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	78,387	78,717	78,275	78,641
Assumed conversion of dilutive employee stock-based awards	1,858	800	1,694	773
Assumed conversion of preferred stock	27,278	27,278	27,278	27,504
Diluted weighted-average common shares outstanding	107,523	106,795	107,247	106,918

The following table presents the calculation of basic and diluted EPS for the Company’s Common Stock:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands, except per share data)
Calculation of basic EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$	61,593	$	7,427	$	103,332	$	36,699
Weighted-average common shares outstanding	78,387		78,717		78,275		78,641
Basic EPS	$	0.79	$	0.09	$	1.32	$	0.47

Calculation of diluted EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	75,989	$	9,156	$	127,517	$	45,320
Diluted weighted-average common shares outstanding	107,523		106,795		107,247		106,918
Diluted EPS	$	0.71	$	0.09	$	1.19	$	0.42

Stock-Based Compensation

Six Months Ended June 30,	2011		2010

Risk-free interest rate	2.04	%	2.00	%
Expected volatility	47.24	%	49.18	%
Dividend yield	—		—
Weighted-average expected life (years)	5.77		5.68
Forfeiture rate	5.00	%	5.00	%

Accounting for Derivatives and Hedging Activities

- Definition

Disclosure of accounting policy for its derivative instruments and hedging activities. Disclosure may include: (1) Each method used to account for derivative financial instruments and derivative commodity instruments ("derivatives"); (2) the types of derivatives accounted for under each method; (3) the criteria required to be met for each accounting method used, including a discussion of the criteria required to be met for hedge or deferral accounting and accrual or settlement accounting (for example, whether and how risk reduction, correlation, designation, and effectiveness tests are applied); (4) the accounting method used if the criteria specified for hedge accounting are not met; (5) the method used to account for termination of derivatives designated as hedges or derivatives used to affect directly or indirectly the terms, fair values, or cash flows of a designated item; (6) the method used to account for derivatives when the designated item matures, is sold, is extinguished, or is terminated. In addition, the method used to account for derivatives designated to an anticipated transaction, when the anticipated transaction is no longer likely to occur; and (7) where and when derivatives, and their related gains or losses are reported in the statement of financial position, cash flows, and results of operations and (8) an accounting policy decision to offset fair value amounts with counterparties. An entity may also describe its embedded derivatives, and the method(s) used to determine the fair values of derivatives and any significant assumptions used in such valuations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph n
-Article 4

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 39
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
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-Paragraph 3
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579245-113959

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+ Details

- Definition

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

+ References + Details

- Definition

Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.

+ References + Details

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies

Schedule of promotional allowances

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Rooms	$	5,528	$	5,990	$	10,739	$	11,960
Food and beverage	25,461		24,931		48,689		51,035
Other	2,433		2,722		4,688		5,324
Total promotional allowances	$	33,422	$	33,643	$	64,116	$	68,319

Schedule of estimated cost of providing complimentary services

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Rooms	$	2,010	$	2,319	$	4,024	$	4,603
Food and beverage	18,645		19,001		36,264		38,195
Other	1,440		1,742		2,794		3,471
Total cost of complimentary services	$	22,095	$	23,062	$	43,082	$	46,269

Allocation of net income attributable to shareholders under the two-class method

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands)
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	75,989	$	9,156	$	127,517	$	45,320
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to preferred stock	14,396		1,729		24,185		8,621
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$	61,593	$	7,427	$	103,332	$	36,699

Reconciliation of the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS

	Three Months Ended June 30,		Six Months Ended June 30,
	2011	2010	2011	2010
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	78,387	78,717	78,275	78,641
Assumed conversion of dilutive employee stock-based awards	1,858	800	1,694	773
Assumed conversion of preferred stock	27,278	27,278	27,278	27,504
Diluted weighted-average common shares outstanding	107,523	106,795	107,247	106,918

Calculation of basic and diluted EPS for the entity's common stock

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(in thousands, except per share data)
Calculation of basic EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$	61,593	$	7,427	$	103,332	$	36,699
Weighted-average common shares outstanding	78,387		78,717		78,275		78,641
Basic EPS	$	0.79	$	0.09	$	1.32	$	0.47

Calculation of diluted EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	75,989	$	9,156	$	127,517	$	45,320
Diluted weighted-average common shares outstanding	107,523		106,795		107,247		106,918
Diluted EPS	$	0.71	$	0.09	$	1.19	$	0.42

Weighted-average assumptions used in Black-Scholes option pricing model

Six Months Ended June 30,	2011		2010

Risk-free interest rate	2.04	%	2.00	%
Expected volatility	47.24	%	49.18	%
Dividend yield	—		—
Weighted-average expected life (years)	5.77		5.68
Forfeiture rate	5.00	%	5.00	%

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2011

Property and Equipment

Schedule of property and equipment, net

	June 30,			December 31,
	2011			2010
	(in thousands)

Land and improvements	$	392,725		$	298,482
Building and improvements	1,705,418			1,534,117
Furniture, fixtures, and equipment	993,142			938,443
Leasehold improvements	17,151			17,089
Construction in progress	94,942			106,963
Total property and equipment	3,203,378			2,895,094
Less accumulated depreciation	(1,023,641		)	(929,320		)
Property and equipment, net	$	2,179,737		$	1,965,774

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets

Reconciliation of goodwill and accumulated goodwill impairment losses

Balance at December 31, 2010:
Goodwill	$	2,019,613
Accumulated goodwill impairment losses	(833,857		)
Goodwill, net	$	1,185,756
Other	(2,699		)
Balance at June 30, 2011:
Goodwill	$	2,016,914
Accumulated goodwill impairment losses	(833,857		)
Goodwill, net	$	1,183,057

Schedule of gross carrying value, accumulated amortization, and net book value of each major class of intangible asset

	June 30, 2011						December 31, 2010
	(in thousands)
	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Indefinite-life intangible assets	$	417,934	$	—	$	417,934	$	412,686	$	—	$	412,686
Other intangible assets	49,726		48,737		989		49,600		47,134		2,466
Total	$	467,660	$	48,737	$	418,923	$	462,286	$	47,134	$	415,152

Schedule of expected intangible asset amortization expense

The following table presents expected intangible asset amortization expense based on existing intangible assets at June 30, 2011 (in thousands):

Remainder of 2011	$	540
2012	253
2013	54
2014	54
2015	35
Thereafter	53
Total	$	989

Schedule of goodwill and other intangible assets by reporting unit

Reporting Unit	Remaining Goodwill and other intangible assets at June 30, 2011
Hollywood Casino Lawrenceburg	$	362,491
Hollywood Casino Joliet	212,857
Hollywood Casino Aurora	207,207
Argosy Casino Riverside	159,296
Black Gold Casino at Zia Park	146,096
Argosy Casino Alton	135,511
Argosy Casino Sioux City	92,795
Hollywood Casino Baton Rouge	75,521
Others	210,206
Total	$	1,601,980

- Definition

Tabular disclosure of goodwill by reportable segment and in total. Disclosure details may include, but are not limited to, the carrying amount of goodwill, goodwill acquired during the year, goodwill impairment losses recognized, goodwill written-off due to the sale of a business unit, goodwill not yet allocated, and any other changes to goodwill.

+ References + Details

Long-term Debt and Derivatives (Tables)

6 Months Ended

Jun. 30, 2011

Long-term Debt and Derivatives

Schedule of long-term debt, net of current maturities

	June 30, 2011			December 31, 2010
	(in thousands)

Senior secured credit facility due October 2012	$	1,518,125		$	1,589,125
$250 million 6 3/4% senior subordinated notes due March 2015	250,000			250,000
$325 million 8 ¾% senior subordinated notes due August 2019	325,000			325,000
Other long-term obligations	1,890			3,782
Capital leases	3,121			3,216
	2,098,136			2,171,123
Less current maturities of long-term debt	(3,052		)	(357,927		)
	$	2,095,084		$	1,813,196

Schedule of future minimum repayments of long-term debt

The following is a schedule of future minimum repayments of long-term debt as of June 30, 2011 (in thousands):

Within one year	$	3,052
1-3 years	165
3-5 years	250,193
Over 5 years	1,844,726
Total minimum payments	$	2,098,136

Schedule of effect of derivative instruments on the consolidated statement of income

The effect of derivative instruments on the consolidated statement of income for the three months ended June 30, 2011 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(332	)	Interest expense	$	(3,625	)	None	$	—
Total	$	(332	)		$	(3,625	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(1	)
Total		$	(1	)

The effect of derivative instruments on the consolidated statement of income for the six months ended June 30, 2011 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(672	)	Interest expense	$	(8,173	)	None	$	—
Total	$	(672	)		$	(8,173	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(4	)
Total		$	(4	)

The effect of derivative instruments on the consolidated statement of income for the three months ended June 30, 2010 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(2,792	)	Interest expense	$	(6,364	)	None	$	—
Total	$	(2,792	)		$	(6,364	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(4	)
Total		$	(4	)

The effect of derivative instruments on the consolidated statement of income for the six months ended June 30, 2010 was as follows (in thousands):

Derivatives in a Cash Flow Hedging Relationship	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)

Interest rate swap contracts	$	(10,178	)	Interest expense	$	(12,859	)	None	$	—
Total	$	(10,178	)		$	(12,859	)		$	—

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Gain (Loss) Recognized in Income on Derivative

Interest rate swap contracts	Interest expense	$	(38	)
Total		$	(38	)

Schedule of the fair value of the interest rate swap contract liabilities included in accrued interest within the consolidated balance sheets

	June 30, 2011			December 31, 2010
	(in thousands)
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Interest rate swap contracts	Accrued interest	$	4,645	Accrued interest	$	13,034
Total derivatives designated as hedging instruments		$	4,645		$	13,034

Derivatives not designated as hedging instruments
Interest rate swap contracts	Accrued interest	$	—	Accrued interest	$	3,712
Total derivatives not designated as hedging instruments		$	—		$	3,712

Total derivatives		$	4,645		$	16,746

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28541-108399

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

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-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6584090&loc=d3e28878-108400

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

+ Details

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References + Details

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2011

Income Taxes

Reconciliation of liability for unrecognized tax benefits

	Noncurrent tax liabilities
	(in thousands)
Balance at January 1, 2011	$	36,846
Additions based on current year positions	661
Reductions based on prior year positions	(1,397		)
Decreases due to settlements and/or reduction in liabilities	(7,317		)
Currency translation adjustments	1,680
Balance at June 30, 2011	$	30,473

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References + Details

Subsidiary Guarantors (Tables)

6 Months Ended

Jun. 30, 2011

Subsidiary Guarantors.

Schedule of condensed consolidating financial statements

	Penn			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Senior Secured Credit Facility
At June 30, 2011
Condensed Consolidating Balance Sheet
Total current assets	$	151,664		$	293,513		$	41,027		$	(719	)	$	485,485
Property and equipment, net	15,226			1,937,696			226,815			—			2,179,737
Total other assets	3,851,307			4,956,449			240,403			(7,165,913		)	1,882,246
Total assets	$	4,018,197		$	7,187,658		$	508,245		$	(7,166,632	)	$	4,547,468
Total current liabilities	$	13,365		$	270,230		$	26,139		$	(717	)	$	309,017
Total long-term liabilities	2,066,724			3,149,356			32,248			(2,947,986		)	2,300,342
Total shareholders’ equity	1,938,108			3,768,072			449,858			(4,217,929		)	1,938,109
Total liabilities and shareholders’ equity	$	4,018,197		$	7,187,658		$	508,245		$	(7,166,632	)	$	4,547,468
Three Months Ended June 30, 2011
Condensed Consolidating Statement of Income
Net revenues	$	—		$	648,907		$	38,972		$	—		$	687,879
Total operating expenses	25,294			486,304			35,689			—			547,287
(Loss) income from operations	(25,294		)	162,603			3,283			—			140,592
Other income (expenses)	18,275			(44,243		)	(315		)	—			(26,283		)
(Loss) income from operations before income taxes	(7,019		)	118,360			2,968			—			114,309
Taxes on income	(13,421		)	50,463			1,278			—			38,320
Net income	$	6,402		$	67,897		$	1,690		$	—		$	75,989
Six Months Ended June 30, 2011
Condensed Consolidating Statement of Income
Net revenues	$	—		$	1,277,896		$	77,006		$	—		$	1,354,902
Total operating expenses	51,307			968,545			71,723			—			1,091,575
(Loss) income from operations	(51,307		)	309,351			5,283			—			263,327
Other income (expenses)	27,181			(83,344		)	(3,090		)	—			(59,253		)
(Loss) income from operations before income taxes	(24,126		)	226,007			2,193			—			204,074
Taxes on income	(22,798		)	97,803			1,552			—			76,557
Net (loss) income	(1,328		)	128,204			641			0			127,517
Six Months Ended June 30, 2011
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities	$	199,268		$	9,620		$	82,089		$	—		$	290,977
Net cash used in investing activities	(1,322		)	(2,373		)	(141,085		)	—			(144,780		)
Net cash (used in) provided by financing activities	(69,335		)	(2,048		)	786			—			(70,597		)
Net increase (decrease) in cash and cash equivalents	128,611			5,199			(58,210		)	—			75,600
Cash and cash equivalents at beginning of year	6,276			157,992			82,117			—			246,385
Cash and cash equivalents at end of period	$	134,887		$	163,191		$	23,907		$	—		$	321,985

	Penn			Subsidiary Guarantors			Subsidiary Non- Guarantors			Eliminations			Consolidated
	(in thousands)
Senior Secured Credit Facility
At December 31, 2010
Condensed Consolidating Balance Sheet
Total current assets	$	31,422		$	261,768		$	131,204		$	41,559		$	465,953
Property and equipment, net	15,328			1,775,913			174,533			—			1,965,774
Total other assets	3,848,412			5,042,516			167,466			(7,027,242		)	2,031,152
Total assets	$	3,895,162		$	7,080,197		$	473,203		$	(6,985,683	)	$	4,462,879
Total current liabilities	$	355,018		$	293,588		$	1,370		$	41,553		$	691,529
Total long-term liabilities	1,762,379			3,159,736			45,024			(2,973,555		)	1,993,584
Total shareholders’ equity	1,777,765			3,626,873			426,809			(4,053,681		)	1,777,766
Total liabilities and shareholders’ equity	$	3,895,162		$	7,080,197		$	473,203		$	(6,985,683	)	$	4,462,879
Three Months Ended June 30, 2010
Condensed Consolidating Statement of Income
Net revenues	$	—		$	590,706		$	7,605		$	—		$	598,311
Total operating expenses	21,466			484,084			41,050			—			546,600
(Loss) income from operations	(21,466		)	106,622			(33,445		)	—			51,711
Other income (expenses)	34,917			(66,695		)	(159		)	—			(31,937		)
Income (loss) from operations before income taxes	13,451			39,927			(33,604		)	—			19,774
Taxes on income	(8,046		)	32,154			(11,306		)	—			12,802
Net income (loss) including noncontrolling interests	21,497			7,773			(22,298		)	—			6,972
Less: Net loss attributable to noncontrolling interests	—			—			(2,184		)	—			(2,184		)
Net income (loss) attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	21,497		$	7,773		$	(20,114	)	$	—		$	9,156
Six Months Ended June 30, 2010
Condensed Consolidating Statement of Income
Net revenues	$	—		$	1,176,084		$	14,550		$	—		$	1,190,634
Total operating expenses	44,344			954,786			47,442			—			1,046,572
(Loss) income from operations	(44,344		)	221,298			(32,892		)	—			144,062
Other income (expenses)	46,323			(113,567		)	(988		)	—			(68,232		)
Income (loss) from operations before income taxes	1,979			107,731			(33,880		)	—			75,830
Taxes on income	(17,948		)	65,827			(15,176		)	—			32,703
Net income (loss) including noncontrolling interests	19,927			41,904			(18,704		)	—			43,127
Less: Net loss attributable to noncontrolling interests	—			—			(2,193		)	—			(2,193		)
Net income (loss) attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$	19,927		$	41,904		$	(16,511	)	$	—		$	45,320
Six Months Ended June 30, 2010
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities	$	272,657		$	192,059		$	(241,367	)	$	—		$	223,349
Net cash used in investing activities	(1,316		)	(199,610		)	(74,244		)	—			(275,170		)
Net cash used in financing activities	(261,554		)	(1,539		)	—			—			(263,093		)
Net increase (decrease) in cash and cash equivalents	9,787			(9,090		)	(315,611		)	—			(314,914		)
Cash and cash equivalents at beginning of year	6,385			145,519			561,214			—			713,118
Cash and cash equivalents at end of period	$	16,172		$	136,429		$	245,603		$	—		$	398,204

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments

Schedule of estimated fair values of financial instruments

	June 30, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	321,985	$	321,985	$	246,385	$	246,385
Investment in corporate debt securities	6,720		6,720		5,828		5,828
Loan receivable	—		—		230,500		230,500
Financial liabilities:
Long-term debt
Senior secured credit facility	1,518,125		1,518,125		1,589,125		1,589,125
Senior subordinated notes	575,000		604,375		575,000		612,875
Other long-term obligations	1,890		1,890		3,782		3,782
Interest rate swap contracts	4,645		4,645		16,746		16,746

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 14
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15
-Subparagraph b-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32
-Subparagraph a, c(1), c(2), c(3), d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 18
-Subparagraph c(2), d, e, f
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 19
-Subparagraph a, b, c(1), d(1)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

+ Details

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2011 Total
Assets:
Investment in corporate debt securities	Other assets	$	6,720	$	—	$	—	$	6,720

Liabilities:
Interest rate swap contracts	Accrued interest	—		4,645		—		4,645

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2010 Total
Assets:
Investment in corporate debt securities	Other assets	$	5,828	$	—	$	—	$	5,828

Liabilities:
Interest rate swap contracts	Accrued interest	—		16,746		—		16,746

Certain long-lived assets measured at fair value on non-recurring basis

	Balance Sheet Location	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2011 Total		Total Reduction in Fair Value Recorded at June 30, 2010
Assets:
Long-lived assets	Other assets	$	—	$	17,310	$	—	$	17,310	$	(30,726	)
										$	(30,726	)

Organization and Basis of Presentation (Details)	Jun. 30, 2011
Organization and Basis of Presentation
Number of facilities the entity owns, manages, or has ownership interests in	26
Number of jurisdictions in which the entity operates	18
Maximum ownership interest in unconsolidated affiliates to be accounted for under the equity method (as a percent)	50.00%

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenue recognition
Promotional allowances	$ 33,422	$ 33,643	$ 64,116	$ 68,319
Cost of complimentary services	22,095	23,062	43,082	46,269
Rooms
Revenue recognition
Promotional allowances	5,528	5,990	10,739	11,960
Cost of complimentary services	2,010	2,319	4,024	4,603
Food and beverage
Revenue recognition
Promotional allowances	25,461	24,931	48,689	51,035
Cost of complimentary services	18,645	19,001	36,264	38,195
Other
Revenue recognition
Promotional allowances	2,433	2,722	4,688	5,324
Cost of complimentary services	$ 1,440	$ 1,742	$ 2,794	$ 3,471

Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Earnings Per Share
Preferred stock, shares outstanding (in shares)	12,275		12,275		12,275
Net income loss available to common stockholders
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$ 75,989	$ 9,156	$ 127,517	$ 45,320
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to preferred stock	14,396	1,729	24,185	8,621
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$ 61,593	$ 7,427	$ 103,332	$ 36,699
Determination of shares:
Weighted-average common shares outstanding (in shares)	78,387,000	78,717,000	78,275,000	78,641,000
Assumed conversion of dilutive employee stock-based awards (in shares)	1,858,000	800,000	1,694,000	773,000
Assumed conversion of preferred stock (in shares)	27,278,000	27,278,000	27,278,000	27,504,000
Diluted weighted-average common shares outstanding (in shares)	107,523,000	106,795,000	107,247,000	106,918,000
Repurchase of preferred stock (in shares)					(225)
Anti-dilutive securities, options to purchase shares outstanding (in shares)	2,816,053,000	8,463,022	2,894,152,000	8,451,707
Calculation of basic EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries applicable to common stock	$ 61,593	$ 7,427	$ 103,332	$ 36,699
Weighted-average common shares outstanding (in shares)	78,387,000	78,717,000	78,275,000	78,641,000
Basic earnings per common share (in dollars per share)	$ 0.79	$ 0.09	$ 1.32	$ 0.47
Calculation of diluted EPS attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries:
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	$ 75,989	$ 9,156	$ 127,517	$ 45,320
Diluted weighted-average common shares outstanding (in shares)	107,523,000	106,795,000	107,247,000	106,918,000
Diluted earnings per common share (in dollars per share)	$ 0.71	$ 0.09	$ 1.19	$ 0.42
Common stock price less than $45
Determination of shares:
Common stock price (in dollars per share)	45		$ 45
Increase in diluted weighted-average common shares outstanding (in shares)			27,277,778
Common stock price between $45 and $67
Determination of shares:
Common stock price, low end of range (in dollars per share)	45		$ 45
Common stock price, high end of range (in dollars per share)	$ 67		$ 67
Aggregate liquidation preference of preferred stock	$ 1,230,000		$ 1,230,000
Increase in diluted weighted-average common shares outstanding, low end of range (in shares)			18,320,896
Increase in diluted weighted-average common shares outstanding, high end of range (in shares)			27,277,778
Common stock price more than $67
Determination of shares:
Common stock price (in dollars per share)	$ 67		$ 67
Increase in diluted weighted-average common shares outstanding (in shares)			18,320,896

Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2011	Jun. 30, 2010
Stock-Based Compensation
Time period of historical volatility of stock used to estimate expected volatility (in years)				5.77
Weighted-average assumptions used in the Black-Scholes option-pricing model
Risk-free interest rate (as a percent)				2.04%	2.00%
Expected volatility (as a percent)				47.24%	49.18%
Weighted-average expected life (in years)				5.77	5.68
Forfeiture rate (as a percent)				5.00%	5.00%
Summary of derivative instruments
Number of variable interest payment obligations				2
Notional value of cash flow hedges	$ 540.0			$ 540.0
Reference rate of swap yield curve used to determine fair value of interest rate swaps				LIBOR
Phantom stock unit awards
Share based compensation arrangement by share based payment award
Vesting period (in years)			Five years
Unrecognized compensation cost	7.6			$ 7.6
Recognized compensation expense	0.6			1.0
Stock appreciation rights
Share based compensation arrangement by share based payment award
Vesting period (in years)		Four years
Unrecognized compensation cost	5.6			5.6
Recognized compensation expense	$ 0.4			$ 0.7

New Accounting Pronouncements (Details) $ in Millions	6 Months Ended
New Accounting Pronouncements (Details) $ in Millions	Jun. 30, 2011	Jan. 02, 2011 USD ($)
New Accounting Pronouncements
Number of separate statements in which the entity is required to present comprehensive income	2
Increase in retained earnings due to adoption of new accounting pronouncement		$ 2.9

Acquisition and Other Recent Business Ventures (Details) $ in Millions	1 Months Ended
	Mar. 31, 2009	Jun. 02, 2011 USD ($)	Feb. 28, 2011	Dec. 31, 2010 USD ($)
M Resort
Acquisition
Purchase price of the acquired entity		$ 230.5
Purchase price allocated to loan receivable within total other assets		2.8		$ 230.5
Purchase price allocated to property and equipment, net		203.3
Purchase price allocated to total current assets		13.7
Purchase price allocated to total current liabilities		$ 17.3
Location of facility in distance from major metropolitan area (in miles)	10
Size of property where facility is located (in acres)	90
Area of gaming space at resort (in square feet)	92,000
Number of guest rooms and suites at resort	390
Number of restaurants at resort	9
Number of destination bars at resort	5
Minimum area of meeting and conference space at resort (in square feet)	60,000
Number of parking facility, a spa and fitness center at resort	4,700
Area of food events piazza at resort (in square feet)	100,000
Rosecroft Raceway
Acquisition
Location of facility in distance from major metropolitan area (in miles)			13
Size of property where facility is located (in acres)			125
Length of oval track at raceway (in miles)			5/8-mile
Number of race paddocks at raceway			7
Size of grandstand building at raceway (in square feet)			53,000
Size of clubhouse building at raceway (in square feet)			96,000
Number of stories in clubhouse building at raceway			3

Investment In and Advances to Unconsolidated Affiliates (Details) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jun. 16, 2011	Apr. 08, 2011
Kansas Entertainment
Business ventures
Ownership interest in joint venture (as a percent)		50.00%	50.00%
Proportionate share in joint venture			$ 155.0
Funding for capital expenditure and other operating expenses		$ 11.2	$ 21.4
Maryland RE & R LLC
Business ventures
Ownership interest in joint venture (as a percent)		49.00%	49.00%
Ownership interest in joint venture under agreement of sale (as a percent)				49.00%
Gain on sale of joint venture interest	$ 20.0
Maxxam
Business ventures
Ownership interest in joint venture (as a percent)		50.00%	50.00%
Loan provided to joint venture to cover development costs			$ 375.0
Maxxam \| Senior financing
Business ventures
Basis points added to reference rate, low end of range (as a percent)		8.00%	8.00%
Basis points added to reference rate, high end of range (as a percent)		9.00%	9.00%
Variable rate basis			LIBOR
Maxxam \| Subordinated financing
Business ventures
Basis points added to reference rate, low end of range (as a percent)		5.00%	5.00%
Basis points added to reference rate, high end of range (as a percent)		6.00%	6.00%
Variable rate basis			LIBOR
Sam Houston Race Park in Houston
Business ventures
Size of race park (in acres)					323
Valley Race Park in Harlingen
Business ventures
Size of race park (in acres)					80
Size of dog racing and simulcasting facility (in square feet)					91,000
Planned racetrack in Laredo
Business ventures
Size of property for a planned development of racetrack (in acres)					135
Freehold Raceway
Business ventures
Ownership interest in joint venture (as a percent)		50.00%	50.00%
Texas Racing Commission
Business ventures
Ownership interest in joint venture (as a percent)					50.00%

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Plant and equipment
Property and equipment	$ 3,203,378		$ 3,203,378		$ 2,895,094
Less accumulated depreciation	(1,023,641)		(1,023,641)		(929,320)
Property and equipment, net	2,179,737		2,179,737		1,965,774
Depreciation expense	53,400	$ 50,900	105,800	$ 100,400
Interest capitalized in connection with major construction projects	1,000	$ 1,700	1,800	$ 2,800
Property and equipment increase, total, due primarily to acquisition			308,300
Land and improvements
Plant and equipment
Property and equipment	392,725		392,725		298,482
Building and improvements
Plant and equipment
Property and equipment	1,705,418		1,705,418		1,534,117
Furniture, fixtures and equipment
Plant and equipment
Property and equipment	993,142		993,142		938,443
Leasehold improvements
Plant and equipment
Property and equipment	17,151		17,151		17,089
Construction in progress
Plant and equipment
Property and equipment	$ 94,942		$ 94,942		$ 106,963

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Reconciliation of goodwill and accumulated goodwill impairment losses
Balance at the beginning of the period, Goodwill gross			$ 2,019,613
Balance at the beginning of the period, Accumulated goodwill impairment losses			(833,857)
Balance at the beginning of the period, Goodwill, net			1,185,756
Other			(2,699)
Balance at the end of the period, Goodwill gross	$ 2,016,914		2,016,914
Balance at the end of the period, Accumulated goodwill impairment losses	(833,857)		(833,857)
Balance at the end of the period, Goodwill, net	1,183,057		1,183,057
Intangible assets
Indefinite-life intangible assets, Gross Carrying Value	417,934		417,934		$ 412,686
Other intangible assets, Gross Carrying Value	49,726		49,726		49,600
Other intangible assets, Accumulated Amortization	48,737		48,737		47,134
Other intangible assets, Net Book Value	989		989		2,466
Intangible assets, Gross Carrying Value	467,660		467,660		462,286
Intangible assets, Net Book Value	418,923		418,923		$ 415,152
Intangible asset amortization expense	800	$ 1,700	1,600	$ 3,400
Expected future amortization expense
Remainder of 2011			540
2012			253
2013			54
2014			54
2015			35
Thereafter			53
Total			989
Reporting Units
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	1,601,980		1,601,980
Hollywood Casino Lawrenceburg
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	362,491		362,491
Hollywood Casino Joliet
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	212,857		212,857
Hollywood Casino Aurora
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	207,207		207,207
Argosy Casino Riverside
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	159,296		159,296
Black Gold Casino at Zia Park
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	146,096		146,096
Argosy Casino Alton
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	135,511		135,511
Argosy Casino Sioux City
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	92,795		92,795
Hollywood Casino Baton Rouge
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	75,521		75,521
Others
Goodwill and other intangible assets
Remaining goodwill and other intangible assets	$ 210,206		$ 210,206

Long-term Debt and Derivatives (Details) - USD ($) $ in Thousands	Jul. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Long-term Debt
Debt		$ 2,098,136	$ 2,171,123
Less current maturities of long-term debt		(3,052)	(357,927)
Long-term debt, net of current maturities		2,095,084	1,813,196
Senior secured credit facility due October 2012
Long-term Debt
Debt		1,518,125	1,589,125
$250 million 6 3/4% senior subordinated notes due March 2015
Long-term Debt
Debt	$ 250,000	$ 250,000	$ 250,000
Debt instrument interest rate stated percentage (as a percent)		6.75%	6.75%
Principal amount of long-term debt		$ 250,000	$ 250,000
$325 million 8 3/4% senior subordinated notes due August 2019
Long-term Debt
Debt		$ 325,000	$ 325,000
Debt instrument interest rate stated percentage (as a percent)		8.75%	8.75%
Principal amount of long-term debt		$ 325,000	$ 325,000
Other long-term obligations
Long-term Debt
Debt		1,890	3,782
Capital leases
Long-term Debt
Debt		$ 3,121	$ 3,216

Long-term Debt and Derivatives (Details 2) $ in Thousands	1 Months Ended	3 Months Ended				6 Months Ended
Long-term Debt and Derivatives (Details 2) $ in Thousands	Jul. 31, 2011	Sep. 30, 2012 USD ($)	Jun. 30, 2012 USD ($)	Mar. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jul. 14, 2011 USD ($)	Dec. 31, 2010 USD ($)
Future minimum repayments of long-term debt
Within one year						$ 3,052
1-3 years						165
3-5 years						250,193
Over 5 years						1,844,726
Total minimum payments						2,098,136		$ 2,171,123
Term loan outstanding						1,518,100
Letters of credit outstanding						26,500
Available borrowing capacity						614,100
Quarterly principal payment of term loan		$ 387,800	$ 387,800	$ 387,800	$ 354,900
Long-term Debt
Increase (decrease) in amount outstanding under senior credit facility						$ (71,000)
Issuance of debt
Long-term Debt
Maximum borrowing capacity							$ 2,150,000
Number of term loans	2
Revolving credit facility \| Issuance of debt
Long-term Debt
Maximum borrowing capacity							700,000
Variable rate Term Loan A \| Issuance of debt
Long-term Debt
Variable rate term loan							700,000
Maximum borrowing capacity							700,000
Variable rate Term Loan B \| Issuance of debt
Long-term Debt
Variable rate term loan							$ 750,000

Long-term Debt and Derivatives (Details 3) - USD ($) $ in Millions	Jun. 30, 2011	Dec. 31, 2010
$250 million 6 3/4% senior subordinated notes due March 2015
Covenants
Principal amount of long-term debt	$ 250	$ 250
Debt instrument interest rate stated percentage (as a percent)	6.75%	6.75%
$325 million 8 3/4% senior subordinated notes due August 2019
Covenants
Principal amount of long-term debt	$ 325	$ 325
Debt instrument interest rate stated percentage (as a percent)	8.75%	8.75%

Long-term Debt and Derivatives (Details 4) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Interest Rate Swap Contracts
Percentage of debt hedged by interest rate derivatives, excluding revolving credit, as required by credit facility (as a percent)	50.00%		50.00%
Maximum length of time from closing of credit facility to enter into a fixed rate debt arrangement or interest rate swap			100 days
Derivatives instruments impact on consolidated statement of income
Amortization from OCI related to de-designation of derivatives	$ 600	$ 4,200	$ 2,500	$ 8,500
Gain (loss) reclassified from OCI in next twelve months	4,600		4,600
Derivatives Designated as Hedging Instruments
Derivatives instruments impact on consolidated statement of income
Derivatives in a Cash Flow Hedging Relationship, Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(332)	(2,792)	(672)	(10,178)
Derivatives in a Cash Flow Hedging Relationship, Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	(3,625)	(6,364)	(8,173)	(12,859)
Derivatives Designated as Hedging Instruments \| Interest rate swap contracts
Derivatives instruments impact on consolidated statement of income
Derivatives in a Cash Flow Hedging Relationship, Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(332)	(2,792)	(672)	(10,178)
Derivatives in a Cash Flow Hedging Relationship, Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	(3,625)	(6,364)	(8,173)	(12,859)
Derivatives Not Designated as Hedging Instruments
Derivatives instruments impact on consolidated statement of income
Derivatives Not Designated as Hedging Instruments, Gain (Loss) Recognized in Income on Derivative	(1)	(4)	(4)	(38)
Derivatives Not Designated as Hedging Instruments \| Interest rate swap contracts
Derivatives instruments impact on consolidated statement of income
Derivatives Not Designated as Hedging Instruments, Gain (Loss) Recognized in Income on Derivative	$ (1)	$ (4)	$ (4)	$ (38)

Long-term Debt and Derivatives (Details 5) - USD ($) $ in Thousands	Jun. 30, 2011	Dec. 31, 2010
Derivatives instruments impact on consolidated balance sheets
Fair value of derivative liabilities	$ 4,645	$ 16,746
Derivatives Designated as Hedging Instruments
Derivatives instruments impact on consolidated balance sheets
Fair value of derivative liabilities	4,645	13,034
Derivatives Designated as Hedging Instruments \| Interest rate swap contracts
Derivatives instruments impact on consolidated balance sheets
Fair value of derivative liabilities	$ 4,645	13,034
Derivatives Not Designated as Hedging Instruments
Derivatives instruments impact on consolidated balance sheets
Fair value of derivative liabilities		3,712
Derivatives Not Designated as Hedging Instruments \| Interest rate swap contracts
Derivatives instruments impact on consolidated balance sheets
Fair value of derivative liabilities		$ 3,712

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Income Taxes
Balance at the beginning of the period, unrecognized tax benefits			$ 36,846
Additions based on current year positions			661
Reductions based on prior year positions			(1,397)
Decreases due to settlements and/or reduction in liabilities			(7,317)
Currency translation adjustments			1,680
Balance at the end of the period, Goodwill grossunrecognized tax benefits	$ 30,473		$ 30,473
Effective income tax rate (as a percent)	33.50%	64.70%	37.50%	43.10%

Commitments and Contingencies (Details) $ in Millions	1 Months Ended			3 Months Ended	6 Months Ended	61 Months Ended
Commitments and Contingencies (Details) $ in Millions	Aug. 31, 2011 USD ($)	Oct. 01, 2008 USD ($)	Sep. 30, 2008 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jun. 12, 2009	Jan. 21, 2009	Sep. 11, 2008 USD ($)	Jul. 16, 2008	Apr. 20, 2007	May 30, 2006	May 27, 2006
CD Gaming Ventures, LLC
Litigation
Proceeds from sale of real estate	$ 11.0
Subsidy on local horse racing interests
Litigation
Number of casinos affected by the law													4
Number of casinos in Illinois													9
Percentage of tax surcharge (as a percent)													3.00%
Number of other riverboats affected by the law												2
Number of orders by which court ordered law unconditional (in number)											2
Number of amicus curiae briefs filed								7
Number of racetracks included in lawsuit							2
Incremental gaming tax expense				$ 2.6	$ 5.1	$ 54.8
Subsidy on local horse racing interests \| Hollywood Casino Joliet
Litigation
Percentage of tax surcharge being paid (as a percent)				3.00%	3.00%	3.00%
Subsidy on local horse racing interests \| Hollywood Casino Aurora
Litigation
Percentage of tax surcharge being paid (as a percent)				3.00%	3.00%	3.00%
Purported class action lawsuit for violation of Securities Exchange Act of 1934
Litigation
Number of plaintiffs added										3
Breach in pre-development agreement \| Kansas Penn Gaming, LLC
Litigation
Damages sought value			$ 50.0
Privilege fee paid in conjunction with the gaming application for the Cherokee County zone									$ 25.0
Litigation against HV Properties of Kansas, LLC ("HV") \| Kansas Penn Gaming, LLC
Litigation
Damages sought value		$ 37.5
Amount awarded towards the reimbursement of the attorney's fees and costs incurred		$ 0.9

Subsidiary Guarantors (Details) - USD ($) $ in Millions	Jun. 30, 2011	Dec. 31, 2010
$250 million 6 3/4% senior subordinated notes due March 2015
Long-term Debt
Principal amount of long-term debt	$ 250	$ 250
Debt instrument interest rate stated percentage (as a percent)	6.75%	6.75%
$325 million 8 3/4% senior subordinated notes due August 2019
Long-term Debt
Principal amount of long-term debt	$ 325	$ 325
Debt instrument interest rate stated percentage (as a percent)	8.75%	8.75%

Subsidiary Guarantors (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Subsidiary Guarantors (Details 2) - USD ($) $ in Thousands	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010	Dec. 31, 2009
Condensed Consolidating Balance Sheet
Total current assets	$ 485,485		$ 485,485		$ 465,953
Property and equipment, net	2,179,737		2,179,737		1,965,774
Total other assets	1,882,246		1,882,246		2,031,152
Total assets	4,547,468		4,547,468		4,462,879
Total current liabilities	309,017		309,017		691,529
Total long-term liabilities	2,300,342		2,300,342		1,993,584
Total shareholders' equity	1,938,109	$ 1,898,591	1,938,109	$ 1,898,591	1,777,766	$ 1,852,076
Total liabilities and shareholders' equity	4,547,468		4,547,468		4,462,879
Condensed Consolidating Statement of Income
Net revenues	687,879	598,311	1,354,902	1,190,634
Total operating expenses	547,287	546,600	1,091,575	1,046,572
(Loss) income from operations	140,592	51,711	263,327	144,062
Other income (expenses)	(26,283)	(31,937)	(59,253)	(68,232)
(Loss) income from operations before income taxes	114,309	19,774	204,074	75,830
Taxes on income	38,320	12,802	76,557	32,703
Net income including noncontrolling interests	75,989	6,972	127,517	43,127
Less: Net loss attributable to noncontrolling interests		(2,184)		(2,193)
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries	75,989	9,156	127,517	45,320
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities			290,977	223,349
Net cash used in investing activities			(144,780)	(275,170)
Net cash used in financing activities			(70,597)	(263,093)
Net increase (decrease) in cash and cash equivalents			75,600	(314,914)
Cash and cash equivalents at beginning of year		713,118	246,385	713,118
Cash and cash equivalents at end of period	$ 321,985	398,204	$ 321,985	398,204
Penn
Consolidating Financial Statements
Direct or indirect ownership percentage in subsidiary guarantors (as a percent)	100.00%		100.00%
Condensed Consolidating Balance Sheet
Total current assets	$ 151,664		$ 151,664		31,422
Property and equipment, net	15,226		15,226		15,328
Total other assets	3,851,307		3,851,307		3,848,412
Total assets	4,018,197		4,018,197		3,895,162
Total current liabilities	13,365		13,365		355,018
Total long-term liabilities	2,066,724		2,066,724		1,762,379
Total shareholders' equity	1,938,108		1,938,108		1,777,765
Total liabilities and shareholders' equity	4,018,197		4,018,197		3,895,162
Condensed Consolidating Statement of Income
Total operating expenses	25,294	21,466	51,307	44,344
(Loss) income from operations	(25,294)	(21,466)	(51,307)	(44,344)
Other income (expenses)	18,275	34,917	27,181	46,323
(Loss) income from operations before income taxes	(7,019)	13,451	(24,126)	1,979
Taxes on income	(13,421)	(8,046)	(22,798)	(17,948)
Net income including noncontrolling interests	6,402	21,497	(1,328)	19,927
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries		21,497		19,927
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities			199,268	272,657
Net cash used in investing activities			(1,322)	(1,316)
Net cash used in financing activities			(69,335)	(261,554)
Net increase (decrease) in cash and cash equivalents			128,611	9,787
Cash and cash equivalents at beginning of year			6,276	6,385
Cash and cash equivalents at end of period	134,887	16,172	134,887	16,172
Subsidiary Guarantors
Condensed Consolidating Balance Sheet
Total current assets	293,513		293,513		261,768
Property and equipment, net	1,937,696		1,937,696		1,775,913
Total other assets	4,956,449		4,956,449		5,042,516
Total assets	7,187,658		7,187,658		7,080,197
Total current liabilities	270,230		270,230		293,588
Total long-term liabilities	3,149,356		3,149,356		3,159,736
Total shareholders' equity	3,768,072		3,768,072		3,626,873
Total liabilities and shareholders' equity	7,187,658		7,187,658		7,080,197
Condensed Consolidating Statement of Income
Net revenues	648,907	590,706	1,277,896	1,176,084
Total operating expenses	486,304	484,084	968,545	954,786
(Loss) income from operations	162,603	106,622	309,351	221,298
Other income (expenses)	(44,243)	(66,695)	(83,344)	(113,567)
(Loss) income from operations before income taxes	118,360	39,927	226,007	107,731
Taxes on income	50,463	32,154	97,803	65,827
Net income including noncontrolling interests	67,897	7,773	128,204	41,904
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries		7,773		41,904
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities			9,620	192,059
Net cash used in investing activities			(2,373)	(199,610)
Net cash used in financing activities			(2,048)	(1,539)
Net increase (decrease) in cash and cash equivalents			5,199	(9,090)
Cash and cash equivalents at beginning of year			157,992	145,519
Cash and cash equivalents at end of period	163,191	136,429	163,191	136,429
Subsidiary Non-Guarantors
Condensed Consolidating Balance Sheet
Total current assets	41,027		41,027		131,204
Property and equipment, net	226,815		226,815		174,533
Total other assets	240,403		240,403		167,466
Total assets	508,245		508,245		473,203
Total current liabilities	26,139		26,139		1,370
Total long-term liabilities	32,248		32,248		45,024
Total shareholders' equity	449,858		449,858		426,809
Total liabilities and shareholders' equity	508,245		508,245		473,203
Condensed Consolidating Statement of Income
Net revenues	38,972	7,605	77,006	14,550
Total operating expenses	35,689	41,050	71,723	47,442
(Loss) income from operations	3,283	(33,445)	5,283	(32,892)
Other income (expenses)	(315)	(159)	(3,090)	(988)
(Loss) income from operations before income taxes	2,968	(33,604)	2,193	(33,880)
Taxes on income	1,278	(11,306)	1,552	(15,176)
Net income including noncontrolling interests	1,690	(22,298)	641	(18,704)
Less: Net loss attributable to noncontrolling interests		(2,184)		(2,193)
Net income attributable to the shareholders of Penn National Gaming, Inc. and subsidiaries		(20,114)		(16,511)
Condensed Consolidating Statement of Cash Flows
Net cash provided by (used in) operating activities			82,089	(241,367)
Net cash used in investing activities			(141,085)	(74,244)
Net cash used in financing activities			786
Net increase (decrease) in cash and cash equivalents			(58,210)	(315,611)
Cash and cash equivalents at beginning of year			82,117	561,214
Cash and cash equivalents at end of period	23,907	$ 245,603	23,907	$ 245,603
Eliminations
Condensed Consolidating Balance Sheet
Total current assets	(719)		(719)		41,559
Total other assets	(7,165,913)		(7,165,913)		(7,027,242)
Total assets	(7,166,632)		(7,166,632)		(6,985,683)
Total current liabilities	(717)		(717)		41,553
Total long-term liabilities	(2,947,986)		(2,947,986)		(2,973,555)
Total shareholders' equity	(4,217,929)		(4,217,929)		(4,053,681)
Total liabilities and shareholders' equity	$ (7,166,632)		(7,166,632)		$ (6,985,683)
Condensed Consolidating Statement of Income
Net income including noncontrolling interests			$ 0

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 02, 2011	Dec. 31, 2010
Loan Receivable
Amount of The M Resorts LLC debt acquired in an anticipated noncash conversion		$ 230,500	$ 230,500
Loan receivable			230,500
Interest Rate Swap Contracts
Reference rate of swap yield curve used to determine fair value of interest rate swaps	LIBOR
Financial assets:
Loan receivable			230,500
Carrying Amount
Loan Receivable
Loan receivable			230,500
Financial assets:
Cash and cash equivalents	$ 321,985		246,385
Investment in corporate debt securities	6,720		5,828
Loan receivable			230,500
Financial liabilities:
Senior secured credit facility	1,518,125		1,589,125
Senior subordinated notes	575,000		575,000
Other long-term obligations	1,890		3,782
Interest rate swap contracts	4,645		16,746
Fair Value
Loan Receivable
Loan receivable			230,500
Financial assets:
Cash and cash equivalents	321,985		246,385
Investment in corporate debt securities	6,720		5,828
Loan receivable			230,500
Financial liabilities:
Senior secured credit facility	1,518,125		1,589,125
Senior subordinated notes	604,375		612,875
Other long-term obligations	1,890		3,782
Interest rate swap contracts	$ 4,645		$ 16,746

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2010	Jun. 30, 2010	Jun. 30, 2011	Dec. 31, 2010
Assets:
Total Reduction in Fair Value	$ (30,590)	$ (30,726)
Liabilities:
Pre-tax impairment charge of land purchased in Columbus's Arena district	$ 30,500	30,500
Pre-tax impairment charge of new casino riverboat at Hollywood Casino Lawrenceburg		200
Recurring basis \| Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
Assets:
Investment in corporate debt securities			$ 6,720	$ 5,828
Recurring basis \| Significant Other Observable Inputs (Level 2)
Liabilities:
Interest rate swap contracts			4,645	16,746
Recurring basis \| Fair Value
Assets:
Investment in corporate debt securities			6,720	5,828
Liabilities:
Interest rate swap contracts			4,645	$ 16,746
Non-recurring
Assets:
Total Reduction in Fair Value		$ (30,726)
Non-recurring \| Significant Other Observable Inputs (Level 2)
Assets:
Long-lived assets			17,310
Non-recurring \| Fair Value
Assets:
Long-lived assets			$ 17,310

Insurance Recoveries and Deductibles (Details) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended	27 Months Ended
	Mar. 31, 2009 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)
Fire \| Hollywood Casino Joliet
Extraordinary Items
Cost of renovation	$ 55,000
Insurance policy limit	57,000
Delay in completion limit	14,000
Property damage limit	43,000
Property damage deductible	$ 50
Delay in completion deductible (in days)	30
Comprehensive business interruption and property damage overall limit	$ 228,000
Property damage deductible	$ 2,500
Business interruption deductible (in hours)	48
Insurance proceeds received to date		$ 16,900	$ 18,600	$ 81,200
Pre-tax gain (loss) recorded		16,800	18,500
Flood \| Hollywood Casino Tunica Flood
Extraordinary Items
Pre-tax gain (loss) recorded		(5,200)	(5,200)
Property insurance coverage limit		300,000	300,000	300,000
Property insurance coverage limit related to property damage		$ 5,000	$ 5,000	$ 5,000
Property insurance coverage limit for number of business interruption periods (in days)			2

Subsequent Events (Details)	1 Months Ended	3 Months Ended			6 Months Ended
Subsequent Events (Details)	Jul. 31, 2011 USD ($)	Sep. 30, 2011 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2010 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2010 USD ($)	Jul. 18, 2011	Jul. 14, 2011 USD ($)	Dec. 31, 2010 USD ($)
New revolving credit facility
Debt extinguishment loss				$ 519,000		$ 519,000
Period of operating contract for the Casino Rama facility (in years)	5
Maximum operating fees per year of the Casino Rama facility	$ 5,000,000
Maryland RE & R LLC
New revolving credit facility
Gain on sale of joint venture interest		$ 20,000,000
$250 million 6 3/4% senior subordinated notes due March 2015
New revolving credit facility
Variable rate term loan			$ 250,000,000		$ 250,000,000				$ 250,000,000
Issuance of debt
New revolving credit facility
Maximum borrowing capacity								$ 2,150,000,000
Number of term loans	2
Issuance of debt \| Revolving credit facility
New revolving credit facility
Maximum borrowing capacity								$ 700,000,000
Variable rate basis	LIBOR
Basis points added to reference rate (as a percent)								1.75%
Number of properties	2
Issuance of debt \| Variable rate Term Loan A
New revolving credit facility
Variable rate term loan								$ 700,000,000
Maximum borrowing capacity								$ 700,000,000
Variable rate basis	LIBOR
Basis points added to reference rate (as a percent)								1.75%
Issuance of debt \| Variable rate Term Loan B
New revolving credit facility
Variable rate term loan								$ 750,000,000
Variable rate basis	LIBOR
Basis points added to reference rate (as a percent)								2.75%
Floor interest rate (as a percent)								1.00%
Issuance of debt \| New revolving credit facility
New revolving credit facility
Variable rate term loan								$ 700,000,000
Maximum borrowing capacity								$ 700,000,000
Redemption of debt \| $250 million 6 3/4% senior subordinated notes due March 2015
New revolving credit facility
Redemption of debt	$ 250,000,000
Redemption price of debt instrument for each $1000 principal amount	1,022,500,000
Principal amount used for ratio of debt instrument redemption price	$ 1,000
Debt extinguishment loss		$ 18,000,000
Anticipated competition
New revolving credit facility
Number of properties	2
Surcharge tax paid			$ 2,600,000		$ 5,100,000
Anticipated competition \| Hollywood Casino Joliet
New revolving credit facility
Percentage of tax surcharge (as a percent)							3.00%
Anticipated competition \| Hollywood Casino Aurora
New revolving credit facility
Percentage of tax surcharge (as a percent)							3.00%

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2011	Jul. 28, 2011
Document and Entity Information
Entity Registrant Name	PENN NATIONAL GAMING INC
Entity Central Index Key	0000921738
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		78,924,555
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2