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Document and Entity Information - shares	3 Months Ended
Mar. 31, 2016	Apr. 30, 2016
Document and Entity Information
Entity Registrant Name	PENN NATIONAL GAMING INC
Entity Central Index Key	0000921738
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
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		81,537,523
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets
Cash and cash equivalents	$ 214,238	$ 237,009
Receivables, net of allowance for doubtful accounts of $2,434 and $2,428 at March 31, 2016 and December 31, 2015, respectively	47,029	45,186
Prepaid expenses	65,976	76,784
Other current assets	13,177	13,497
Total current assets	340,420	372,476
Property and equipment, net	2,935,270	2,980,068
Other assets
Investment in and advances to unconsolidated affiliates	165,356	168,149
Goodwill	911,942	911,942
Other intangible assets, net	391,149	391,442
Advances to the Jamul Tribe	246,792	197,722
Other assets	137,759	116,953
Total other assets	1,852,998	1,786,208
Total assets	5,128,688	5,138,752
Current liabilities
Current portion of financing obligation to GLPI	52,685	50,548
Current maturities of long-term debt	96,543	92,108
Accounts payable	68,059	72,816
Accrued expenses	94,318	93,666
Accrued interest	8,641	7,091
Accrued salaries and wages	76,451	98,671
Gaming, pari-mutuel, property, and other taxes	52,382	57,486
Insurance financing	8,534	3,125
Other current liabilities	72,661	82,263
Total current liabilities	530,274	557,774
Long-term liabilities
Long-term financing obligation to GLPI, net of current portion	3,499,295	3,514,080
Long-term debt, net of current maturities and debt issuance costs	1,597,870	1,618,851
Deferred income taxes	107,300	107,921
Other noncurrent liabilities	43,046	18,169
Total long-term liabilities	5,247,511	5,259,021
Shareholders' equity (deficit)
Common stock ($.01 par value, 200,000,000 shares authorized, 83,451,574 and 83,056,668 shares issued and 81,284,181 and 80,889,275 shares outstanding, at March 31, 2016 and December 31, 2015, respectively)	834	830
Treasury stock, at cost (2,167,393 shares held at March 31, 2016 and December 31, 2015)	(28,414)	(28,414)
Additional paid-in capital	992,608	988,686
Retained deficit	(1,610,883)	(1,634,591)
Accumulated other comprehensive loss	(3,242)	(4,554)
Total shareholders' equity (deficit)	(649,097)	(678,043)
Total liabilities and shareholders' equity (deficit)	5,128,688	5,138,752
Series B Preferred Stock
Shareholders' equity (deficit)
Preferred stock
Series C Preferred Stock
Shareholders' equity (deficit)
Preferred stock

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Receivables, net of allowance for doubtful accounts (in dollars)	$ 2,434	$ 2,428
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	83,451,574	83,056,668
Common stock, shares outstanding	81,284,181	80,889,275
Treasury stock, shares issued	2,167,393	2,167,393
Series B Preferred Stock
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	0	0
Preferred stock, shares outstanding	0	0
Series C Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	18,500	18,500
Preferred stock, shares issued	8,624	8,624
Preferred stock, shares outstanding	8,624	8,624

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues
Gaming	$ 656,701	$ 591,336
Food, beverage, hotel and other	137,848	108,763
Management service fee	2,473	1,927
Revenues	797,022	702,026
Less promotional allowances	(40,571)	(37,888)
Net revenues	756,451	664,138
Operating expenses
Gaming	335,317	294,895
Food, beverage, hotel and other	98,079	77,929
General and administrative	116,504	116,256
Depreciation and amortization	66,020	63,369
Total operating expenses	615,920	552,449
Income from operations	140,531	111,689
Other income (expenses)
Interest expense	(116,512)	(108,346)
Interest income	5,240	1,870
Income from unconsolidated affiliates	4,609	3,982
Other	(2,426)	3,089
Total other expenses	(109,089)	(99,405)
Income from operations before income taxes	31,442	12,284
Income tax provision	7,734	10,415
Net income	$ 23,708	$ 1,869
Earnings per common share:
Basic earnings per common share (in dollars per share)	$ 0.26	$ 0.02
Diluted earnings per common share (in dollars per share)	$ 0.26	$ 0.02

Condensed Consolidated Statements of Changes in Shareholders' Deficit - USD ($) $ in Thousands	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Deficit	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2014		$ 813	$ (28,414)	$ 956,146	$ (1,635,277)	$ (1,282)	$ (708,014)
Balance (in shares) at Dec. 31, 2014	8,624	79,161,817
Increase (Decrease) in Shareholders' Equity
Share-based compensation arrangements, net of tax benefits of $6,379 and $689 for the three months ended March 31, 2015 and 2016 respectively		$ 5		11,228			11,233
Share-based compensation arrangements (in shares)		543,816
Foreign currency translation adjustment						(1,716)	(1,716)
Net income					1,869		1,869
Balance at Mar. 31, 2015		$ 818	(28,414)	967,374	(1,633,408)	(2,998)	(696,628)
Balance (in shares) at Mar. 31, 2015	8,624	79,705,633
Balance at Dec. 31, 2015		$ 830	(28,414)	988,686	(1,634,591)	(4,554)	(678,043)
Balance (in shares) at Dec. 31, 2015	8,624	80,889,275
Increase (Decrease) in Shareholders' Equity
Share-based compensation arrangements, net of tax benefits of $6,379 and $689 for the three months ended March 31, 2015 and 2016 respectively		$ 4		3,922			3,926
Share-based compensation arrangements (in shares)		394,906
Foreign currency translation adjustment						1,312	1,312
Net income					23,708		23,708
Balance at Mar. 31, 2016		$ 834	$ (28,414)	$ 992,608	$ (1,610,883)	$ (3,242)	$ (649,097)
Balance (in shares) at Mar. 31, 2016	8,624	81,284,181

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net income	$ 23,708	$ 1,869
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	66,020	63,369
Amortization of items charged to interest expense	1,876	1,505
Change in contingent purchase price	(1,201)	351
(Gain) loss on sale of property and equipment and assets held for sale	(1,101)	153
Income from unconsolidated affiliates	(4,609)	(3,982)
Distributions from unconsolidated affiliates	7,400	8,000
Deferred income taxes	(740)	18,648
Charge for stock-based compensation	1,455	2,084
(Increase) decrease,
Accounts receivable	(1,803)	727
Prepaid expenses and other current assets	(11,579)	(2,742)
Other assets	3,039	6,400
(Decrease) Increase,
Accounts payable	(1,951)	2,887
Accrued expenses	648	4,931
Accrued interest	1,550	6,264
Accrued salaries and wages	(22,220)	(14,363)
Gaming, pari-mutuel, property and other taxes	(4,920)	3,754
Income taxes	22,826	(11,738)
Other current and noncurrent liabilities	(7,065)	(10,081)
Net cash provided by operating activities	71,333	78,036
Investing activities
Capital project expenditures	(6,496)	(36,929)
Capital maintenance expenditures	(14,873)	(11,860)
Advances to the Jamul Tribe	(51,781)	(16,341)
Proceeds from sale of property and equipment and assets held for sale	2,091	146
Investment in joint ventures		(328)
Acquisition of other property and equipment	148
Net cash used in investing activities	(71,207)	(65,312)
Financing activities
Proceeds from exercise of options	1,742	2,743
Principal payments on financing obligation with GLPI	(12,648)	(12,475)
Proceeds from issuance of long-term debt, net of issuance costs	12,214	45,000
Principal payments on long-term debt	(23,404)	(21,886)
Payments of other long-term obligations	(6,899)
Proceeds from insurance financing	9,193	885
Payments on insurance financing	(3,784)	(4,314)
Tax benefit from stock options exercised	689	6,379
Net cash (used in) provided by financing activities	(22,897)	16,332
Net (decrease) increase in cash and cash equivalents	(22,771)	29,056
Cash and cash equivalents at beginning of year	237,009	208,673
Cash and cash equivalents at end of period	214,238	237,729
Supplemental disclosure
Interest expense paid, net of amounts capitalized	113,629	100,179
Income tax (refunds received)/taxes paid	$ (12,481)	$ 226

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Revenue Recognition and Promotional Allowances

Gaming revenue consists mainly of slot and video lottery gaming machine revenue as well as to a lesser extent table game and poker revenue. 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 “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 increases. Table game revenue is the aggregate of table drop adjusted for the change in aggregate table chip inventory. Table drop is the total dollar amount of the currency, coins, chips, tokens and outstanding markers (credit instruments) that are removed from the live gaming tables.

Food, beverage, hotel 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. Advance deposits on lodging are recorded as accrued liabilities until services are provided to the customer.

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 (“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 months ended March 31, 2016 and 2015 are as follows:

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Rooms	$	9,122	$	8,336
Food and beverage	29,521		27,448
Other	1,928		2,104

Total promotional allowances	$	40,571	$	37,888

The estimated cost of providing such complimentary services for the three months ended March 31, 2016 and 2015 are as follows:

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Rooms	$	1,197	$	936
Food and beverage	11,523		10,833
Other	745		832

Total cost of complimentary services	$	13,465	$	12,601

Gaming and Racing Taxes

The Company is subject to gaming and pari-mutuel taxes based on gross gaming revenue and pari-mutuel revenue in the jurisdictions in which it operates. The Company primarily recognizes gaming and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states where or in which wagering occurs. In certain states in which the Company operates, gaming taxes are based on graduated rates. The Company records gaming tax expense at the Company’s estimated effective gaming tax rate for the year, considering estimated taxable gaming revenue and the applicable rates. Such estimates are adjusted each interim period. If gaming tax rates change during the year, such changes are applied prospectively in the determination of gaming tax expense in future interim periods. Finally, the Company recognizes purse expense based on the statutorily required percentage of revenue that is required to be paid out in the form of purses to the winning owners of horse races run at the Company’s racetracks in the period in which wagering occurs. For the three months ended March 31, 2016, these expenses, which are recorded primarily within gaming expense in the condensed consolidated statements of income, were $256.4 million, as compared to $227.0 million for the three months ended March 31, 2015.

Long-term asset related to the Jamul Tribe

On April 5, 2013, the Company announced that, subject to final National Indian Gaming Commission approval, it and the Jamul Indian Village of California (the “Tribe”) had entered into definitive agreements to jointly develop a Hollywood Casino-branded casino on the Tribe’s trust land in San Diego County, California. The definitive agreements were entered into to: (i) secure the development, management, and branding services of the Company to assist the Tribe during the pre-development and entitlement phase of the project; (ii) set forth the terms and conditions under which the Company will provide a loan or loans to the Tribe to fund certain development costs; and (iii) create an exclusive arrangement between the parties.

The Tribe is a federally recognized Indian Tribe holding a government-to-government relationship with the U.S. through the U.S. Department of the Interior’s Bureau of Indian Affairs and possessing certain inherent powers of self-government. The Tribe is the beneficial owner of approximately six acres of reservation land located within the exterior boundaries of the State of California held by the U.S. in trust for the Tribe (the “Property”). The Tribe exercises jurisdiction over the Property pursuant to its powers of self-government and consistent with the resolutions and ordinances of the Tribe. The arrangement between the Tribe and the Company provides the Tribe with the expertise, knowledge and capacity of a proven developer and operator of gaming facilities and provides the Company with the exclusive right to administer and oversee planning, designing, development, construction management, and coordination during the development and construction of the project as well as the management of a gaming facility on the Property.

The proposed $390 million development project will include a three-story gaming and entertainment facility of approximately 200,000 square feet featuring over 1,700 slot machines, 43 live table games, including poker, multiple restaurants, bars and lounges and a partially enclosed parking structure with over 1,800 spaces. In mid-January 2014, the Company commenced construction activities at the site and it is anticipated that the facility will open in mid-summer this year. The Company currently provides financing to the Tribe in connection with the project and, upon opening, will manage and provide branding for the casino. The Company has a conditional loan commitment to the Tribe (that can be terminated under certain circumstances) for up to $400 million and anticipates it will fund approximately $390 million related to this development.

The Company is accounting for the development agreement and related loan commitment letter with the Tribe as a loan (the “Senior Loans”) with accrued interest in accordance with ASC 310, “Receivables.” The Senior Loans represent advances made by the Company to the Tribe for the development and construction of a gaming facility for the Tribe on reservation land. As such, the Tribe will own the casino and its related assets and liabilities. San Diego Gaming Ventures, LLC (a wholly-owned subsidiary of the Company) is a separate legal entity established to account for the Senior Loans and, upon completion of the project and subsequent commencement of gaming operations on the Property, will be the Penn entity which receives management and licensing fees from the Tribe. The Company’s Senior Loans with the Tribe totaled $246.8 million and $197.7 million, which includes accrued interest of $18.9 million, and $13.9 million, at March 31, 2016 and December 31, 2015, respectively. Collectability of the Senior Loans will be derived from the revenues of the casino operations once the project is completed. Based on the Company’s current progress with this project, the Company believes collectability of the Senior Loans is highly certain. However, in the event that the Company’s internal projections related to the profitability of this project and/or the timing of the opening are inaccurate, the Company may be required to record a reserve related to the collectability of the Senior Loans.

The Company considered whether the arrangement with the Tribe represents a variable interest that should be accounted for pursuant to the VIE subsections of ASC 810. The Company noted that the scope and scope exceptions of ASC 810-10-15-12(e) states that a reporting entity shall not consolidate a government organization or financing entity established by a government organization (other than certain financing entities established to circumvent the provisions of the VIE subsections of ASC 810). Based on the status of the Tribe as a government organization, the Company believes its arrangement with the Tribe is not within the scope defined by ASC 810.

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 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 March 31, 2016 and 2015, the Company had outstanding 8,624 shares of Series C Convertible Preferred Stock. The Company determined that the preferred stock qualified as a participating security as defined in ASC 260 since these securities participate in dividends with the Company’s common stock. 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 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 for the three months ended March 31, 2016 and 2015 under the two-class method:

	Three Months Ended March 31,
	2016		2015
	(in thousands)

Net income	$	23,708	$	1,869
Net income applicable to preferred stock	2,282		183

Net income applicable to common stock	$	21,426	$	1,686

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 months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016	2015
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	80,968	79,400
Assumed conversion of dilutive employee stock-based awards	1,448	2,296
Assumed conversion of restricted stock	51	72

Diluted weighted-average common shares outstanding before participating security	82,467	81,768
Assumed conversion of preferred stock	8,624	8,624

Diluted weighted-average common shares outstanding	91,091	90,392

Options to purchase 2,574,719 shares and 1,561,562 shares were outstanding during the three months ended March 31, 2016 and 2015, respectively, but were not included in the computation of diluted EPS because they were antidilutive.

The following tables present the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended March 31,
	2016		2015

Calculation of basic EPS:
Net income applicable to common stock	$	21,426	$	1,686
Weighted-average common shares outstanding	80,968		79,400
Basic EPS	$	0.26	$	0.02

Calculation of diluted EPS using two-class method:
Net income applicable to common stock	$	21,426	$	1,686
Diluted weighted-average common shares outstanding before participating security	82,467		81,768
Diluted EPS	$	0.26	$	0.02

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 5.40 years, in order to match the expected life of the options at the grant date. Historically, at the grant date, there has been no expected dividend yield assumption 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. The Company granted 1,535,823 stock options during the three months ended March 31, 2016.

Stock-based compensation expense for the three months ended March 31, 2016 was $1.5 million, as compared to $2.1 million for the three months ended March 31, 2015, and is included within the condensed consolidated statements of income under general and administrative expense.

The Company’s cash-settled phantom stock unit awards (“PSUs”), which vest over a period of three to four years, entitle employees and directors to receive cash based on the fair value of the Company’s common stock on the vesting date. The PSUs 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.” The Company had a liability, which is included in accrued salaries and wages within the condensed consolidated balance sheets, associated with its PSUs of $5.7 million and $7.8 million at March 31, 2016 and December 31, 2015, respectively. For PSUs held by Penn employees, there was $16.4 million of total unrecognized compensation cost at March 31, 2016 that will be recognized over the grants remaining weighted average vesting period of 1.79 years. For the three months ended March 31, 2016, the Company recognized $3.0 million of compensation expense associated with these awards, as compared to $4.5 million for the three months ended March 31, 2015. The decrease was primarily due to changes in stock price year-over-year for both Penn and GLPI awards held by Penn employees. Amounts paid by the Company for the three months ended March 31, 2016 on these cash-settled awards totaled $4.4 million, as compared to $5.2 million for the three months ended March 31, 2015.

For the Company’s stock appreciation rights (“SARs”), the fair value of the SARs is calculated during each reporting period and estimated using the Black-Scholes option pricing model based on the various inputs discussed below. The Company’s SARs, which vest over a period of four years, are accounted for as liability awards since they will be settled in cash. The Company had a liability, which is included in accrued salaries and wages within the condensed consolidated balance sheets, associated with its SARs of $9.1 million and $8.0 million at March 31, 2016 and December 31, 2015, respectively. For SARs held by Penn employees, there was $9.8 million of total unrecognized compensation cost at March 31, 2016 that will be recognized over the awards remaining weighted average vesting period of 3.06 years. For the three months ended March 31, 2016, the Company recognized $1.9 million of compensation expense associated with these awards, as compared to $4.6 million for the three months ended March 31, 2015. The decrease was primarily due to changes in stock price year-over-year for both Penn and GLPI awards held by Penn employees. Amounts paid by the Company for the three months ended March 31, 2016 on these cash-settled awards totaled $0.4 million, as compared to $1.8 million for the three months ended March 31, 2015.

The following are the weighted-average assumptions used in the Black-Scholes option-pricing model for stock option awards granted during the three month period ended March 31, 2016 and 2015, respectively:

	2016		2015

Risk-free interest rate	1.20	%	1.54	%
Expected volatility	31.22	%	36.93	%
Dividend yield	—		—
Weighted-average expected life (years)	5.40		5.45

Segment Information

The Company’s Chief Executive Officer and President, who is the Company’s Chief Operating Decision Maker, as that term is defined in ASC 280, “Segment Reporting” (“ASC 280”), measures and assesses the Company’s business performance based on regional operations of various properties grouped together based primarily on their geographic locations. The Company’s reportable segments are: (i) East/Midwest, (ii) West, and (iii) Southern Plains.

The East/Midwest reportable segment consists of the following properties: Hollywood Casino at Charles Town Races, Hollywood Casino Bangor, Hollywood Casino at Penn National Race Course, Hollywood Casino Lawrenceburg, Hollywood Casino Toledo, Hollywood Casino Columbus, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course, and Plainridge Park Casino, which opened on June 24, 2015. It also includes the Company’s Casino Rama management service contract.

The West reportable segment consists of the following properties: Zia Park Casino, M Resort, and Tropicana Las Vegas, which was acquired on August 25, 2015, as well as the Hollywood Casino Jamul—San Diego project with the Tribe, which the Company anticipates completing in mid-summer this year.

The Southern Plains reportable segment consists of the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Hollywood Casino Tunica, Hollywood Casino Gulf Coast, Boomtown Biloxi, Hollywood Casino St. Louis, and Prairie State Gaming, which the Company acquired on September 1, 2015, and includes the Company’s 50% investment in Kansas Entertainment, LLC (“Kansas Entertainment”), which owns the Hollywood Casino at Kansas Speedway.

The Other category consists of the Company’s standalone racing operations, namely Rosecroft Raceway, Sanford-Orlando Kennel Club, and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. If the Company is successful in obtaining gaming operations at these locations, they would be assigned to one of the Company’s regional executives and reported in their respective reportable segment. The Other category also includes the Company’s corporate overhead operations, which does not meet the definition of an operating segment under ASC 280 and Penn Interactive Ventures, LLC, the Company’s wholly-owned subsidiary which represents its social online gaming initiatives and would meet the definition of an operating segment under ASC 280, but is currently immaterial to the Company’s operations.

Management uses adjusted EBITDA as the primary measure of the operating performance of its segments, including the evaluation of operating personnel and believes it is especially relevant in evaluating large, long lived casino projects because they provide a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. The Company defines adjusted EBITDA as earnings before interest, taxes, stock compensation, debt extinguishment charges, impairment charges, insurance recoveries and deductible charges, depreciation and amortization, changes in the estimated fair value of contingent purchase price to the previous owners of Plainridge Racecourse, gain or loss on disposal of assets, and other income or expenses. Adjusted EBITDA is also inclusive of income or loss from unconsolidated affiliates, with the Company’s share of non-operating items (such as depreciation and amortization) added back for its joint venture in Kansas Entertainment. Adjusted EBITDA excludes payments associated with our Master Lease agreement with GLPI as the transaction is accounted for as a financing obligation. Adjusted EBITDA should not be construed as an alternative to operating income, as an indicator of the Company’s operating performance, as an alternative to cash flows from operating activities, as a measure of liquidity, or as any other measure of performance determined in accordance with GAAP. The Company has significant uses of cash flows, including capital expenditures, interest payments, taxes and debt principal repayments, which are not reflected in adjusted EBITDA.

The Company recently announced a realignment of its reporting structure that will result in certain changes to our reportable segments. We plan on finalizing these changes to our internal management reporting system in the second quarter, which will result in the following three geographic regions: Northeast, Midwest and South/West. The changes in the segment reporting have no effect on the Company’s previously reported consolidated operating results. See Part I, Item 2: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional details.

See Note 7 for further information with respect to the Company’s segments.

Other Comprehensive Income

The Company accounts for comprehensive income in accordance with ASC 220, “Comprehensive Income,” which establishes standards for the reporting and presentation of comprehensive income in the consolidated financial statements. The Company presents comprehensive income in two separate but consecutive statements. For the three months ended March 31, 2016 and 2015, the only component of accumulated other comprehensive income was foreign currency translation adjustments.

Property and Equipment

3 Months Ended

Mar. 31, 2016

Property and Equipment

Property and Equipment

4. Property and Equipment

Property and equipment, net, consists of the following:

	March 31,			December 31,
	2016			2015
	(in thousands)

Property and equipment - non-leased
Land and improvements	$	289,030		$	288,910
Building and improvements	396,593			396,497
Furniture, fixtures, and equipment	1,308,387			1,303,153
Leasehold improvements	131,760			129,012
Construction in progress	17,700			9,175

	2,143,470			2,126,747
Less accumulated depreciation	(1,131,767		)	(1,093,115		)

	1,011,703			1,033,632

Property and equipment - master lease
Land and improvements	382,246			382,246
Building and improvements	2,219,018			2,219,018

	2,601,264			2,601,264
Less accumulated depreciation	(677,697		)	(654,828		)

	1,923,567			1,946,436

Property and equipment, net	$	2,935,270		$	2,980,068

Property and equipment, net decreased by $44.8 million for the three months ended March 31, 2016 primarily due to depreciation expense, which is partially offset by improvements at Tropicana Las Vegas, and normal capital maintenance expenditures for the three months ended March 31, 2016.

Depreciation expense, for property and equipment including assets under capital leases, totaled $65.6 million and $63.4 million for the three months ended March 31, 2016 and March 31, 2015, respectively, of which $22.9 million, $23.2 million related to assets under the Master Lease, respectively. No interest was capitalized in connection with major construction projects for the three months ended March 31, 2016 compared to $0.6 million for the three months ended March 31, 2015.

Segment Information

3 Months Ended

Mar. 31, 2016

Segment Information

Segment Information

7. Segment Information

The following tables (in thousands) present certain information with respect to the Company’s segments. Intersegment revenues between the Company’s segments were not material in any of the periods presented below. The income (loss) from operations by segment presented below does not include allocations for corporate overhead costs or expenses associated with utilizing property subject to the Master Lease.

Three months ended March 31, 2016	East/Midwest			West		Southern Plains			Other (1)			Total
Income (loss) from operations	$	111,140		$	13,833	$	60,158		$	(44,600	)	$	140,531
Charge for stock compensation	—			—		—			1,455			1,455
Depreciation and amortization	24,840			6,205		10,281			24,694			66,020
Plainridge contingent purchase price	(1,201		)	—		—			—			(1,201		)
Loss (gain) on disposal of assets	19			17		(33		)	(1,104		)	(1,101		)
Income from unconsolidated affiliates	—			—		4,718			(109		)	4,609
Non-operating items for Kansas JV	—			—		2,570			—			2,570

Adjusted EBITDA	$	134,798		$	20,055	$	77,694		$	(19,664	)	$	212,883

Three months ended March 31, 2015	East/Midwest			West		Southern Plains		Other (1)			Total
Income (loss) from operations	$	90,863		$	15,526	$	55,385	$	(50,085	)	$	111,689
Charge for stock compensation	—			—		—		2,084			2,084
Depreciation and amortization	25,385			2,172		10,782		25,030			63,369
Plainridge contingent purchase price	351			—		—		—			351
(Gain) loss on disposal of assets	(122		)	181		100		(6		)	153
Income from unconsolidated affiliates	—			—		3,788		194			3,982
Non-operating items for Kansas JV	—			—		2,751		—			2,751

Adjusted EBITDA	$	116,477		$	17,879	$	72,806	$	(22,783	)	$	184,379

	East/Midwest		West		Southern Plains		Other (1)		Total
Three months ended March 31, 2016
Net revenues	$	437,457	$	87,559	$	225,235	$	6,200	$	756,451
Capital expenditures	7,843		6,823		6,020		683		21,369

Three months ended March 31, 2015
Net revenues	$	386,544	$	62,585	$	210,269	$	4,740	$	664,138
Capital expenditures	38,574		2,851		6,448		916		48,789

Balance sheet at March 31, 2016
Total assets	1,000,352		893,898		1,081,411		2,153,027		5,128,688
Investment in and advances to unconsolidated affiliates	83		—		100,926		64,347		165,356
Goodwill and other intangible assets, net	387,474		158,339		752,954		4,324		1,303,091

Balance sheet at December 31, 2015
Total assets	1,036,940		842,712		1,098,306		2,160,794		5,138,752
Investment in and advances to unconsolidated affiliates	84		—		103,608		64,457		168,149
Goodwill and other intangible assets, net	387,474		158,339		753,345		4,226		1,303,384

(1)

Includes depreciation expense associated with the real property assets under the Master Lease with GLPI. In addition, total assets include these assets. The interest expense associated with the financing obligation is reflected in the other category. Net revenues and income (loss) from unconsolidated affiliates relate to the Company’s stand-alone racing operations, namely Rosecroft Raceway, Sanford Orlando Kennel Club and the Company’s Texas and New Jersey joint ventures which do not have gaming operations.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
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+ Details

Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Measurements

Fair Value Measurements

9. 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 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.

Long-term debt

The fair value of the Company’s Term Loan A and B components of its senior secured credit facility and senior unsecured notes is estimated based on quoted prices in active markets and as such is a Level 1 measurement. The fair value of the remainder of the Company’s senior secured credit facility approximates its carrying value as it is revolving, variable rate debt and as such is a Level 2 measurement.

Other long term obligations at March 31, 2016, included the relocation fees for Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course and the repayment obligation of a hotel and event center located near Hollywood Casino Lawrenceburg. The fair value of the relocation fees for Hollywood Gaming at Dayton Raceway and Hollywood Gaming at Mahoning Valley Race Course approximates its carrying value as the discount rate of 5.0% approximates the market rate of similar debt instruments and as such is a Level 2 measurement. Finally, the fair value of the repayment obligation for the hotel and event center is estimated based on a rate consistent with comparable municipal bonds and as such is a Level 2 measurement. See Note 5 for further details regarding the Company’s other long term obligations.

Other liabilities

Other liabilities at March 31, 2016 included the contingent purchase price consideration related to the purchase of Plainridge Racecourse. The fair value of the Company’s contingent purchase price consideration related to its Plainridge Racecourse acquisition is estimated based on a discounted cash flow model and as such is a Level 3 measurement. At each reporting period, the Company assesses the fair value of this obligation and changes in its value are recorded in earnings. The amount included in general and administrative expense related to the change in fair value of this obligation was a credit of $1.2 million for the three months ended March 31, 2016 and a charge of $0.4 million for the three months ended March 31, 2015.

The carrying amounts and estimated fair values by input level of the Company’s financial instruments at March 31, 2016 and December 31, 2015 are as follows (in thousands):

	March 31, 2016
	Carrying Amount		Fair Value		Level 1		Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	214,238	$	214,238	$	214,238
Financial liabilities:
Long-term debt
Senior secured credit facility	1,230,032		1,241,129		817,129		424,000
Senior unsecured notes	296,413		294,750		294,750
Other long-term obligations	139,759		140,899				140,899
Other liabilities	12,614		12,614					12,614

	December 31, 2015
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	237,009	$	237,009	$	237,009	$	—	$	—
Financial liabilities:
Long-term debt
Senior secured credit facility	1,239,049		1,251,975		829,975		422,000		—
Senior unsecured notes	296,252		291,000		291,000		—		—
Other long-term obligations	146,992		147,358		—		147,358		—
Other liabilities	13,815		13,815						13,815

The following table summarizes the changes in fair value of the Company’s Level 3 liabilities (in thousands):

	Three Months Ended March 31, 2016
	Liabilities
	Contingent Purchase Price

Balance at January 1, 2016	$	13,815
Total (gains) (realized or unrealized):
Included in earnings	(1,201		)

Balance at March 31, 2016	$	12,614

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 liabilities:

	Valuation	Unobservable
	Technique	Input	Rate
Contingent purchase price	Discounted cash flow	Discount rate	8.30	%

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

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.

The amounts included in promotional allowances for the three months ended March 31, 2016 and 2015 are as follows:

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Rooms	$	9,122	$	8,336
Food and beverage	29,521		27,448
Other	1,928		2,104

Total promotional allowances	$	40,571	$	37,888

The estimated cost of providing such complimentary services for the three months ended March 31, 2016 and 2015 are as follows:

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Rooms	$	1,197	$	936
Food and beverage	11,523		10,833
Other	745		832

Total cost of complimentary services	$	13,465	$	12,601

Gaming and Racing Taxes

Long-term asset related to the Jamul Tribe

Earnings Per Share

The following table sets forth the allocation of net income for the three months ended March 31, 2016 and 2015 under the two-class method:

	Three Months Ended March 31,
	2016		2015
	(in thousands)

Net income	$	23,708	$	1,869
Net income applicable to preferred stock	2,282		183

Net income applicable to common stock	$	21,426	$	1,686

	Three Months Ended March 31,
	2016	2015
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	80,968	79,400
Assumed conversion of dilutive employee stock-based awards	1,448	2,296
Assumed conversion of restricted stock	51	72

Diluted weighted-average common shares outstanding before participating security	82,467	81,768
Assumed conversion of preferred stock	8,624	8,624

Diluted weighted-average common shares outstanding	91,091	90,392

The following tables present the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended March 31,
	2016		2015

Calculation of basic EPS:
Net income applicable to common stock	$	21,426	$	1,686
Weighted-average common shares outstanding	80,968		79,400
Basic EPS	$	0.26	$	0.02

Calculation of diluted EPS using two-class method:
Net income applicable to common stock	$	21,426	$	1,686
Diluted weighted-average common shares outstanding before participating security	82,467		81,768
Diluted EPS	$	0.26	$	0.02

Stock-Based Compensation

	2016		2015

Risk-free interest rate	1.20	%	1.54	%
Expected volatility	31.22	%	36.93	%
Dividend yield	—		—
Weighted-average expected life (years)	5.40		5.45

Segment Information

See Note 7 for further information with respect to the Company’s segments.

Other Comprehensive Income

- Definition

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

+ References + Details

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2016

Summary of Significant Accounting Policies

Schedule of promotional allowances

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Rooms	$	9,122	$	8,336
Food and beverage	29,521		27,448
Other	1,928		2,104

Total promotional allowances	$	40,571	$	37,888

Schedule of estimated cost of providing complimentary services

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Rooms	$	1,197	$	936
Food and beverage	11,523		10,833
Other	745		832

Total cost of complimentary services	$	13,465	$	12,601

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

	Three Months Ended March 31,
	2016		2015
	(in thousands)

Net income	$	23,708	$	1,869
Net income applicable to preferred stock	2,282		183

Net income applicable to common stock	$	21,426	$	1,686

Schedule of 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 March 31,
	2016	2015
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	80,968	79,400
Assumed conversion of dilutive employee stock-based awards	1,448	2,296
Assumed conversion of restricted stock	51	72

Diluted weighted-average common shares outstanding before participating security	82,467	81,768
Assumed conversion of preferred stock	8,624	8,624

Diluted weighted-average common shares outstanding	91,091	90,392

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

The following tables present the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2016 and 2015 (in thousands, except per share data):

	Three Months Ended March 31,
	2016		2015

Calculation of basic EPS:
Net income applicable to common stock	$	21,426	$	1,686
Weighted-average common shares outstanding	80,968		79,400
Basic EPS	$	0.26	$	0.02

Calculation of diluted EPS using two-class method:
Net income applicable to common stock	$	21,426	$	1,686
Diluted weighted-average common shares outstanding before participating security	82,467		81,768
Diluted EPS	$	0.26	$	0.02

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

	2016		2015

Risk-free interest rate	1.20	%	1.54	%
Expected volatility	31.22	%	36.93	%
Dividend yield	—		—
Weighted-average expected life (years)	5.40		5.45

Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Long-term Debt

Schedule of long-term debt, net of current maturities

	March 31,			December 31,
	2016			2015
	(in thousands)

Senior secured credit facility	$	1,248,766		$	1,259,740
$300 million 5.875% senior unsecured notes due November 1, 2021	300,000			300,000
Other long term obligations	139,759			146,992
Capital leases	28,036			28,466

	1,716,561			1,735,198
Less current maturities of long-term debt	(96,543		)	(92,108		)
Less net discounts	(669		)	(686		)
Less debt issuance costs, net of accumulated amortization of $15.1 million and $13.3 million, respectively	(21,479		)	(23,553		)

	$	1,597,870		$	1,618,851

Schedule of future minimum repayments of long-term debt

The following is a schedule of future minimum repayments of long-term debt as of March 31, 2016 (in thousands):

Within one year	$	96,433
1-3 years	986,625
3-5 years	269,340
Over 5 years	364,163

Total minimum payments	$	1,716,561

- 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
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+ Details

Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Information

Schedule of information with respect to the Company's segments

The following tables (in thousands) present certain information with respect to the Company’s segments.

Three months ended March 31, 2016	East/Midwest			West		Southern Plains			Other (1)			Total
Income (loss) from operations	$	111,140		$	13,833	$	60,158		$	(44,600	)	$	140,531
Charge for stock compensation	—			—		—			1,455			1,455
Depreciation and amortization	24,840			6,205		10,281			24,694			66,020
Plainridge contingent purchase price	(1,201		)	—		—			—			(1,201		)
Loss (gain) on disposal of assets	19			17		(33		)	(1,104		)	(1,101		)
Income from unconsolidated affiliates	—			—		4,718			(109		)	4,609
Non-operating items for Kansas JV	—			—		2,570			—			2,570

Adjusted EBITDA	$	134,798		$	20,055	$	77,694		$	(19,664	)	$	212,883

Three months ended March 31, 2015	East/Midwest			West		Southern Plains		Other (1)			Total
Income (loss) from operations	$	90,863		$	15,526	$	55,385	$	(50,085	)	$	111,689
Charge for stock compensation	—			—		—		2,084			2,084
Depreciation and amortization	25,385			2,172		10,782		25,030			63,369
Plainridge contingent purchase price	351			—		—		—			351
(Gain) loss on disposal of assets	(122		)	181		100		(6		)	153
Income from unconsolidated affiliates	—			—		3,788		194			3,982
Non-operating items for Kansas JV	—			—		2,751		—			2,751

Adjusted EBITDA	$	116,477		$	17,879	$	72,806	$	(22,783	)	$	184,379

	East/Midwest		West		Southern Plains		Other (1)		Total
Three months ended March 31, 2016
Net revenues	$	437,457	$	87,559	$	225,235	$	6,200	$	756,451
Capital expenditures	7,843		6,823		6,020		683		21,369

Three months ended March 31, 2015
Net revenues	$	386,544	$	62,585	$	210,269	$	4,740	$	664,138
Capital expenditures	38,574		2,851		6,448		916		48,789

Balance sheet at March 31, 2016
Total assets	1,000,352		893,898		1,081,411		2,153,027		5,128,688
Investment in and advances to unconsolidated affiliates	83		—		100,926		64,347		165,356
Goodwill and other intangible assets, net	387,474		158,339		752,954		4,324		1,303,091

Balance sheet at December 31, 2015
Total assets	1,036,940		842,712		1,098,306		2,160,794		5,138,752
Investment in and advances to unconsolidated affiliates	84		—		103,608		64,457		168,149
Goodwill and other intangible assets, net	387,474		158,339		753,345		4,226		1,303,384

(1)

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Measurements

Schedule of carrying amount and estimated fair values of financial instruments

The carrying amounts and estimated fair values by input level of the Company’s financial instruments at March 31, 2016 and December 31, 2015 are as follows (in thousands):

	March 31, 2016
	Carrying Amount		Fair Value		Level 1		Level 2	Level 3
Financial assets:
Cash and cash equivalents	$	214,238	$	214,238	$	214,238
Financial liabilities:
Long-term debt
Senior secured credit facility	1,230,032		1,241,129		817,129		424,000
Senior unsecured notes	296,413		294,750		294,750
Other long-term obligations	139,759		140,899				140,899
Other liabilities	12,614		12,614					12,614

	December 31, 2015
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	237,009	$	237,009	$	237,009	$	—	$	—
Financial liabilities:
Long-term debt
Senior secured credit facility	1,239,049		1,251,975		829,975		422,000		—
Senior unsecured notes	296,252		291,000		291,000		—		—
Other long-term obligations	146,992		147,358		—		147,358		—
Other liabilities	13,815		13,815						13,815

Summary of the changes in fair value of Level 3 liabilities

The following table summarizes the changes in fair value of the Company’s Level 3 liabilities (in thousands):

	Three Months Ended March 31, 2016
	Liabilities
	Contingent Purchase Price

Balance at January 1, 2016	$	13,815
Total (gains) (realized or unrealized):
Included in earnings	(1,201		)

Balance at March 31, 2016	$	12,614

Summary of significant unobservable inputs used in calculating fair value Level 3 liabilities

	Valuation	Unobservable
	Technique	Input	Rate
Contingent purchase price	Discounted cash flow	Discount rate	8.30	%

Summary of Significant Accounting Policies (Details 3) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Net income loss available to common stockholders
Net income	$ 23,708	$ 1,869
Net income applicable to preferred stock	2,282	183
Net income applicable to common stock	$ 21,426	$ 1,686
Determination of shares:
Weighted-average common shares outstanding (in shares)	80,968,000	79,400,000
Assumed conversion of dilutive employee stock-based awards (in shares)	1,448,000	2,296,000
Assumed conversion of restricted stock (in shares)	51,000	72,000
Diluted weighted-average common shares outstanding before participating security	82,467,000	81,768,000
Assumed conversion of preferred stock (in shares)	8,624,000	8,624,000
Diluted weighted-average common shares outstanding (in shares)	91,091,000	90,392,000
Anti-dilutive securities, options to purchase shares outstanding	2,574,719	1,561,562
Calculation of basic EPS:
Net income applicable to common stock	$ 21,426	$ 1,686
Weighted-average common shares outstanding (in shares)	80,968,000	79,400,000
Basic EPS (in dollars per share)	$ 0.26	$ 0.02
Calculation of diluted EPS using two class method:
Net income applicable to common stock	$ 21,426	$ 1,686
Diluted weighted-average common shares outstanding before participating security	82,467,000	81,768,000
Diluted EPS (in dollars per share)	$ 0.26	$ 0.02
Series C Preferred Stock
Earnings Per Share
Preferred stock, shares outstanding	8,624	8,624	8,624

Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Stock-based compensation costs
Time period of historical volatility of stock used to estimate expected volatility	5 years 4 months 24 days
Expected dividend yield assumption (as a percent)	0.00%
Granted (in shares)	1,535,823
Accrued salaries and wages	$ 76,451		$ 98,671
Weighted-average assumptions used in the Black-Scholes option-pricing model
Risk-free interest rate (as a percent)	1.20%	1.54%
Expected volatility (as a percent)	31.22%	36.93%
Weighted-average expected life	5 years 4 months 24 days	5 years 5 months 12 days
Phantom Share Units (PSUs)
Stock-based compensation costs
Accrued salaries and wages	$ 5,700		7,800
Total compensation cost related to nonvested awards not yet recognized	$ 16,400
Period for recognition of unrecognized compensation cost	1 year 9 months 15 days
Stock based compensation expense	$ 3,000	$ 4,500
Amounts paid on cash settled awards	$ 4,400	5,200
Phantom Share Units (PSUs) \| Minimum
Stock-based compensation costs
Vesting period	3 years
Phantom Share Units (PSUs) \| Maximum
Stock-based compensation costs
Vesting period	4 years
Stock appreciation rights (SARs)
Stock-based compensation costs
Vesting period	4 years
Accrued salaries and wages	$ 9,100		$ 8,000
Total compensation cost related to nonvested awards not yet recognized	$ 9,800
Period for recognition of unrecognized compensation cost	3 years 22 days
Stock based compensation expense	$ 1,900	4,600
Amounts paid on cash settled awards	$ 400	$ 1,800

Long-term Debt (Details 2) - USD ($) $ in Thousands		3 Months Ended
Long-term Debt (Details 2) - USD ($) $ in Thousands	Apr. 28, 2015	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Aug. 31, 2015
Future minimum repayments of long-term debt
Within one year		$ 96,433
1-3 years		986,625
3-5 years		269,340
Over 5 years		364,163
Total minimum payments		1,716,561
Long-term Debt
Long-term debt		1,716,561		$ 1,735,198
Interest expense		116,512	$ 108,346
Revolving credit facility
Long-term Debt
Term of debt	5 years
Maximum borrowing capacity	$ 500,000				$ 633,200
Term loan amount outstanding		424,000
Available borrowing capacity		185,700
Term Loan A Facility
Long-term Debt
Term of debt	5 years
Maximum borrowing capacity	$ 500,000
Increase in maximum borrowing capacity					$ 146,700
Term loan amount outstanding		$ 580,400
Term Loan B Facility
Long-term Debt
Term of debt		7 years
Maximum borrowing capacity		$ 250,000
Term loan amount outstanding		244,400
Senior Secured Credit Facility
Long-term Debt
Term loan amount outstanding		1,248,800
Long-term debt		1,248,766		1,259,740
Letters of credit outstanding		$ 23,500
$300 million 5.875% senior unsecured notes due November 1, 2021
Long-term Debt
Interest rate (as a percent)		5.875%
Long-term debt		$ 300,000		300,000
Other long-term obligations
Long-term Debt
Long-term debt		$ 139,759		$ 146,992

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
Segment Information (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment information
Income (loss) from operations	$ 140,531	$ 111,689
Charge for stock compensation	1,455	2,084
Depreciation and amortization	66,020	63,369
Plainridge contingent purchase price	(1,201)	351
(Gain) loss on disposal of assets	(1,101)	153
Income from unconsolidated affiliates	4,609	3,982
Non-operating items	109,089	99,405
Adjusted EBITDA	212,883	184,379
Net revenues	756,451	664,138
Capital expenditures	21,369	48,789
Total assets	5,128,688		$ 5,138,752
Investment in and advances to unconsolidated affiliates	165,356		168,149
Goodwill and other intangible assets, net	1,303,091		1,303,384
Kansas Entertainment
Segment information
Non-operating items	(2,570)	2,751
East/Midwest
Segment information
Income (loss) from operations	111,140	90,863
Depreciation and amortization	24,840	25,385
Plainridge contingent purchase price	(1,201)	351
(Gain) loss on disposal of assets	19	(122)
Adjusted EBITDA	134,798	116,477
Net revenues	437,457	386,544
Capital expenditures	7,843	38,574
Total assets	1,000,352		1,036,940
Investment in and advances to unconsolidated affiliates	83		84
Goodwill and other intangible assets, net	387,474		387,474
West
Segment information
Income (loss) from operations	13,833	15,526
Depreciation and amortization	6,205	2,172
(Gain) loss on disposal of assets	17	181
Adjusted EBITDA	20,055	17,879
Net revenues	87,559	62,585
Capital expenditures	6,823	2,851
Total assets	893,898		842,712
Goodwill and other intangible assets, net	158,339		158,339
Southern Plains
Segment information
Income (loss) from operations	60,158	55,385
Depreciation and amortization	10,281	10,782
(Gain) loss on disposal of assets	(33)	100
Income from unconsolidated affiliates	4,718	3,788
Adjusted EBITDA	77,694	72,806
Net revenues	225,235	210,269
Capital expenditures	6,020	6,448
Total assets	1,081,411		1,098,306
Investment in and advances to unconsolidated affiliates	100,926		103,608
Goodwill and other intangible assets, net	752,954		753,345
Southern Plains \| Kansas Entertainment
Segment information
Non-operating items	(2,570)	2,751
Other
Segment information
Income (loss) from operations	(44,600)	(50,085)
Charge for stock compensation	1,455	2,084
Depreciation and amortization	24,694	25,030
(Gain) loss on disposal of assets	(1,104)	(6)
Income from unconsolidated affiliates	(109)	194
Adjusted EBITDA	(19,664)	(22,783)
Net revenues	6,200	4,740
Capital expenditures	683	$ 916
Total assets	2,153,027		2,160,794
Investment in and advances to unconsolidated affiliates	64,347		64,457
Goodwill and other intangible assets, net	$ 4,324		$ 4,226

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Assets measured as fair value on a non-recurring basis
Goodwill	$ 911,942		$ 911,942
Plainridge Racecourse \| General and administrative expenses
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Total Gains (Losses), Realized Or Unrealized [Abstract]
Change in fair value in long term obligation, credit (charge) to general and administrative expense	$ 1,200	$ (400)
Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Total Gains (Losses), Realized Or Unrealized [Abstract]
Discount Rate	5.00%
Contingent Purchase Price
Assets measured as fair value on a non-recurring basis
Balance at beginning of the period	$ 13,185
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Total Gains (Losses), Realized Or Unrealized [Abstract]
Included in earnings	(1,201)
Balance at end of the period	$ 12,614
Contingent Purchase Price \| Income approach using discounted cash flow model
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Total Gains (Losses), Realized Or Unrealized [Abstract]
Discount Rate	8.30%
Level 1
Financial assets:
Cash and Cash Equivalents, Fair Value Disclosure	$ 214,238		237,009
Level 3
Financial assets:
Debt Instrument, Fair Value Disclosure	12,614		13,815
Senior Secured Credit Facility \| Level 1
Financial assets:
Debt Instrument, Fair Value Disclosure	817,129		829,975
Senior Secured Credit Facility \| Level 2
Financial assets:
Debt Instrument, Fair Value Disclosure	424,000		422,000
Senior Unsecured Notes \| Level 1
Financial assets:
Debt Instrument, Fair Value Disclosure	294,750		291,000
Other long-term obligations \| Level 2
Financial assets:
Debt Instrument, Fair Value Disclosure	140,899		147,358
Carrying Amount
Financial assets:
Cash and Cash Equivalents, Fair Value Disclosure	214,238		237,009
Debt Instrument, Fair Value Disclosure	12,614		13,815
Carrying Amount \| Senior Secured Credit Facility
Financial assets:
Debt Instrument, Fair Value Disclosure	1,230,032		1,239,049
Carrying Amount \| Senior Unsecured Notes
Financial assets:
Debt Instrument, Fair Value Disclosure	296,413		296,252
Carrying Amount \| Other long-term obligations
Financial assets:
Debt Instrument, Fair Value Disclosure	139,759		146,992
Fair Value
Financial assets:
Cash and Cash Equivalents, Fair Value Disclosure	214,238		237,009
Debt Instrument, Fair Value Disclosure	12,614		13,815
Fair Value \| Senior Secured Credit Facility
Financial assets:
Debt Instrument, Fair Value Disclosure	1,241,129		1,251,975
Fair Value \| Senior Unsecured Notes
Financial assets:
Debt Instrument, Fair Value Disclosure	294,750		291,000
Fair Value \| Other long-term obligations
Financial assets:
Debt Instrument, Fair Value Disclosure	$ 140,899		$ 147,358

Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Millions	1 Months Ended
	Jan. 31, 2015 USD ($)
Condensed Consolidated Statements of Cash Flows
Increased property and equipment, net	$ 15.3
Increased total debt	$ 15.3

Organization and Basis of Presentation	3 Months Ended
Organization and Basis of Presentation	Mar. 31, 2016
Organization and Basis of Presentation
Organization and Basis of Presentation	1.Organization and Basis of Presentation Penn National Gaming, Inc. (“Penn”) and together with its subsidiaries (collectively, the “Company”) is a diversified, multi-jurisdictional owner and manager of gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment. As of March 31, 2016, the Company owned, managed, or had ownership interests in twenty-seven facilities in the following seventeen jurisdictions: Florida, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia and Ontario, Canada. The accompanying unaudited condensed 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 condensed consolidated financial statements include the accounts of Penn and its subsidiaries. Investment in and advances to unconsolidated affiliates, that do not meet the consolidation criteria of the authoritative guidance for voting interest, controlling interest or variable interest entities (“VIE”), 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. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The notes to the consolidated financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2015 should be read in conjunction with these condensed consolidated financial statements. The December 31, 2015 financial information has been derived from the Company’s audited consolidated financial statements.

New Accounting Pronouncements	3 Months Ended
New Accounting Pronouncements	Mar. 31, 2016
New Accounting Pronouncements
New Accounting Pronouncements	3. New Accounting Pronouncements In April and March 2016, the FASB issued ASU 2016-10 and ASU 2016-08, Revenue from Contract with Customers (Topic 606). The amendments of ASU 2016-10 clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments of ASU 2016-08 relate to when another party, along with the entity, is involved in providing a good or service to a customer. The amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. Public entities should apply the amendments for annual reporting periods beginning after December 31, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Management is currently assessing the impact of the new revenue recognition guidance will have on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. For public companies, the amendments are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted for any organization in any interim or annual period. Management plans to implement this change in accounting principle in 2017 and does not anticipate a material impact from this new guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). This ASU primarily provides new guidance for lessees on the accounting treatment of operating leases. Under the new guidance, lessees are required to recognize assets and liabilities arising from operating leases on the balance sheet. ASU 2016-02 also aligns lessor accounting with the revenue recognition guidance in Topic 606 of the Accounting Standards Codification. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 and is required to be adopted on a modified retrospective basis, meaning the new leasing model will be applied to the earliest year presented in the financial statements and thereafter. The Company is evaluating the impact of adopting this new accounting standard on its financial statements. In February 2015, the FASB issued ASU 2015-02 with new consolidation guidance which modifies the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The main provisions of the new guidance include modifying the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, the evaluation of fees paid to a decision maker or a service provider as a variable interest, and the effect of fee arrangements and related parties on the primary beneficiary determination, as well as provides a scope exception for certain investment funds. The new guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the new guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A reporting entity also may apply the new guidance retrospectively. The adoption of this pronouncement had no impact to the Company’s financial statements.

Master Lease Financing Obligation	3 Months Ended
Master Lease Financing Obligation	Mar. 31, 2016
Master Lease Financing Obligation
Master Lease Financing Obligation	6. Master Lease Financing Obligation The Company’s Master Lease with GLPI is accounted for as a financing obligation. The obligation was calculated at the inception of the transaction based on the future minimum lease payments due to GLPI under the Master Lease discounted at 9.70%, which represents the estimated incremental borrowing rate over the lease term, including renewal options that were reasonably assured of being exercised and the funded construction of certain leased real estate assets in development at the date of the Spin-Off. Total payments under the Master Lease were $111.4 million and $108.8 million for the three months ended March 31, 2016 and 2015, respectively, of which $98.7 million and $96.4 million, respectively, were recognized as interest expense.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2016
Income Taxes
Income Taxes	8. Income Taxes At March 31, 2016 and December 31, 2015, the Company had a net deferred tax liability balance of $107.3 million and $107.9 million, respectively, within its condensed consolidated balance sheets. The Company accounts for income taxes in accordance with ASC 740 “Income Taxes”. Under ASC 740, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amount and the tax bases of existing assets and liabilities and are measured at the prevailing enacted tax rates that will be in effect when these differences are settled or realized. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. In the fourth quarter of 2013, the Company concluded that as a result of the failed spin-off-leaseback accounting treatment which resulted in a significant increase to its deferred tax assets, a valuation allowance should be recorded on the Company’s deferred tax assets given the significant negative evidence associated with being in or expecting to be in a three year cumulative pre-tax loss position and the insufficient objectively verifiable positive evidence to support the realization of the Company’s deferred tax assets. As of March 31, 2016, we have a valuation allowance only on the portion of the deferred tax assets that are more likely than not to be realized as a result of the negative objective evidence of being in a three year cumulative loss. The Company calculates the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate (“ETR”) to the full year projected pretax book income or loss excluding certain discrete items. The Company’s ETR (income taxes as a percentage of income from operations before income taxes) including discrete items was 24.6% for the three months ended March 31, 2016, as compared to 84.8% for the three months ended March 31, 2015, primarily due to a year-over-year reduction to our federal and state valuation allowance coupled with an increase to earnings before income taxes.

Organization and Basis of Presentation (Details)	Mar. 31, 2016 jurisdiction facility
Organization and Basis of Presentation
Number of facilities the entity owned, managed, or had ownership interests in \| facility	27
Number of jurisdictions in which the entity operates \| jurisdiction	17

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue recognition
Promotional allowances	$ 40,571	$ 37,888
Cost of complimentary services	13,465	12,601
Gaming and Racing Taxes
Gaming expense	256,400	227,000
Rooms
Revenue recognition
Promotional allowances	9,122	8,336
Cost of complimentary services	1,197	936
Food and beverage
Revenue recognition
Promotional allowances	29,521	27,448
Cost of complimentary services	11,523	10,833
Other
Revenue recognition
Promotional allowances	1,928	2,104
Cost of complimentary services	$ 745	$ 832

Summary of Significant Accounting Policies (Details 2) - Tribe $ in Millions	Apr. 05, 2013 USD ($) ft² a item	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Long-term asset related to the Jamul Tribe
Land owned (in acres) \| a	6
Proposed facility development cost	$ 390.0
Number of stories at facility \| item	3
Size of gaming floor at and entertainment facility (in square feet) \| ft²	200,000
Number of slot machines at facility \| item	1,700
Number of table games at facility \| item	43
Number of parking spaces \| item	1,800
Loan commitment		$ 400.0
Anticipated loan funding		390.0
Senior Loans, includes accrued interest		246.8	$ 197.7
Interest accrued		$ 18.9	$ 13.9

Summary of Significant Accounting Policies (Details 5)	Sep. 01, 2015
Kansas Entertainment
Segment Information
Ownership interest in joint venture (as a percent)	50.00%

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Plant and equipment
Property and equipment, net	$ 2,935,270		$ 2,980,068
Increase (decrease) in property and equipment	(44,800)
Depreciation expense	65,600	$ 63,400
Interest capitalized in connection with major construction projects	0	600
Master Lease Agreement
Plant and equipment
Depreciation expense	22,900	$ 23,200
Land and improvements - non-leased
Plant and equipment
Property and equipment	289,030		288,910
Land and improvements - master lease
Plant and equipment
Property and equipment	382,246		382,246
Building and improvements - non-leased
Plant and equipment
Property and equipment	396,593		396,497
Buildings and improvements - master lease
Plant and equipment
Property and equipment	2,219,018		2,219,018
Furniture, fixtures and equipment
Plant and equipment
Property and equipment	1,308,387		1,303,153
Leasehold improvements
Plant and equipment
Property and equipment	131,760		129,012
Construction in progress - non-leased
Plant and equipment
Property and equipment	17,700		9,175
Non-leased assets
Plant and equipment
Property and equipment	2,143,470		2,126,747
Less accumulated depreciation	(1,131,767)		(1,093,115)
Property and equipment, net	1,011,703		1,033,632
Master lease assets
Plant and equipment
Property and equipment	2,601,264		2,601,264
Less accumulated depreciation	(677,697)		(654,828)
Property and equipment, net	$ 1,923,567		$ 1,946,436

Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Long-term Debt
Long-term debt	$ 1,716,561	$ 1,735,198
Less current maturities of long-term debt	(96,543)	(92,108)
Less net discounts	(669)	(686)
Less debt issuance costs, net of accumulated amortization of $15.1 million and $13.3 million, respectively	(21,479)	(23,553)
Long-term debt, net of current maturities	1,597,870	1,618,851
Other assets	137,759	116,953
Accumulated amortization for debt issuance costs	15,100	13,300
Senior Secured Credit Facility
Long-term Debt
Long-term debt	1,248,766	1,259,740
$300 million 5.875% senior unsecured notes due November 1, 2021
Long-term Debt
Long-term debt	$ 300,000	300,000
Interest rate (as a percent)	5.875%
Principal amount	$ 300,000
Other long-term obligations
Long-term Debt
Long-term debt	139,759	146,992
Capital leases
Long-term Debt
Long-term debt	$ 28,036	$ 28,466

Master Lease Financing Obligation (Details) - Master Lease Agreement - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Capital Leased Assets [Line Items]
Discount rate (as a percent)	9.70%
Total payments under Master Lease	$ 111.4	$ 108.8
Interest expense for the Master Lease	$ 98.7	$ 96.4

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income Taxes
Deferred Income Tax Liabilities, Net, Total	$ 107.3		$ 107.9
Percent of pretax income
Actual effective income tax rate (as a percent)	24.60%	84.80%
Correction of the failed spin-off-leaseback accounting treatment
Income Taxes
Period of cumulative pre-tax loss position	3 years