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Document and Entity Information - shares	3 Months Ended
Mar. 31, 2017	Apr. 27, 2017
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, 2017
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		91,099,858
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 259,488	$ 229,510
Receivables, net of allowance for doubtful accounts of $3,148 and $3,180 at March 31, 2017 and December 31, 2016, respectively	49,490	61,855
Prepaid expenses	55,631	59,707
Other current assets	52,508	48,193
Total current assets	417,117	399,265
Property and equipment, net	2,774,323	2,820,383
Other assets
Investment in and advances to unconsolidated affiliates	154,974	156,176
Goodwill	989,859	989,685
Other intangible assets, net	432,558	435,494
Advances to the Jamul Tribe	91,843	91,401
Other assets	86,366	82,080
Total other assets	1,755,600	1,754,836
Total assets	4,947,040	4,974,484
Current liabilities
Current portion of financing obligation to GLPI	57,936	56,595
Current maturities of long-term debt	35,561	85,595
Accounts payable	29,292	35,091
Accrued expenses	107,699	101,906
Accrued interest	5,426	6,345
Accrued salaries and wages	72,691	92,238
Gaming, pari-mutuel, property, and other taxes	53,840	60,384
Insurance financing	8,135	2,636
Other current liabilities	96,542	95,526
Total current liabilities	467,122	536,316
Long-term liabilities
Long-term financing obligation to GLPI, net of current portion	3,441,359	3,457,485
Long-term debt, net of current maturities and debt issuance costs	1,387,542	1,329,939
Deferred income taxes	127,576	126,924
Noncurrent tax liabilities	27,312	26,791
Other noncurrent liabilities	36,861	40,349
Total long-term liabilities	5,020,650	4,981,488
Shareholders' deficit
Common stock ($.01 par value, 200,000,000 shares authorized, 93,126,159 and 93,289,701 shares issued, and 90,958,766 and 91,122,308 shares outstanding at March 31, 2017 and December 31, 2016, respectively)	931	932
Treasury stock, at cost (2,167,393 shares held at March 31, 2017 and December 31, 2016)	(28,414)	(28,414)
Additional paid-in capital	1,011,167	1,014,119
Retained deficit	(1,520,177)	(1,525,281)
Accumulated other comprehensive loss	(4,239)	(4,676)
Total shareholders' deficit	(540,732)	(543,320)
Total liabilities and shareholders' deficit	4,947,040	4,974,484
Series B Preferred Stock
Shareholders' deficit
Preferred stock
Series C Preferred Stock
Shareholders' deficit
Preferred stock

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
Gaming	$ 661,256	$ 656,701
Food, beverage, hotel and other	147,741	137,848
Management service and licensing fees	2,327	2,473
Reimbursable management costs	6,758
Revenues	818,082	797,022
Less promotional allowances	(41,858)	(40,571)
Net revenues	776,224	756,451
Operating expenses
Gaming	332,053	335,317
Food, beverage, hotel and other	101,075	98,079
General and administrative	125,815	116,504
Reimbursable management costs	6,758
Depreciation and amortization	70,236	66,020
Total operating expenses	635,937	615,920
Income from operations	140,287	140,531
Other income (expenses)
Interest expense	(114,996)	(116,512)
Interest income	2,646	5,240
Income from unconsolidated affiliates	4,548	4,609
Loss on early extinguishment of debt	(23,390)
Other	(1,793)	(2,426)
Total other expenses	(132,985)	(109,089)
Income from operations before income taxes	7,302	31,442
Income tax provision	2,198	7,734
Net income	$ 5,104	$ 23,708
Earnings per common share:
Basic earnings per common share (in dollars per share)	$ 0.06	$ 0.26
Diluted earnings per common share (in dollars per share)	$ 0.06	$ 0.26

Condensed Consolidated Statements of Changes in Shareholders' Deficit - USD ($) $ in Thousands	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained (Deficit) Earnings	Accumulated Other Comprehensive (Loss) Income	Total
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' Deficit
Share-based compensation arrangements, net of tax benefits of $689 for the period ended March 31, 2016		$ 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
Balance at Dec. 31, 2016		$ 932	(28,414)	1,014,119	(1,525,281)	(4,676)	(543,320)
Balance (in shares) at Dec. 31, 2016		91,122,308
Increase (Decrease) in Shareholders' Deficit
Repurchase of Preferred Stock		$ (4)		(5,790)			(5,794)
Repurchase of Preferred Stock (in shares)		(416,886)
Share-based compensation arrangements, net of tax benefits of $689 for the period ended March 31, 2016		$ 3		2,838			2,841
Share-based compensation arrangements (in shares)		253,344
Foreign currency translation adjustment						437	437
Net income					5,104		5,104
Balance at Mar. 31, 2017		$ 931	$ (28,414)	$ 1,011,167	$ (1,520,177)	$ (4,239)	$ (540,732)
Balance (in shares) at Mar. 31, 2017		90,958,766

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net income	$ 5,104	$ 23,708
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	70,236	66,020
Amortization of items charged to interest expense and interest income	1,675	1,876
Change in fair value of contingent purchase price	2,560	(1,201)
Gain on sale of property and equipment and assets held for sale	(45)	(1,101)
Income from unconsolidated affiliates	(4,548)	(4,609)
Distributions from unconsolidated affiliates	5,750	7,400
Deferred income taxes	652	(740)
Charge for stock-based compensation	2,173	1,455
Write off of debt issuance costs	5,377
Decrease (increase), net of businesses acquired
Accounts receivable	6,533	(1,803)
Prepaid expenses and other current assets	(8,432)	(11,579)
Other assets	(1,746)	3,039
(Decrease) increase, net of businesses acquired
Accounts payable	(2,470)	(1,951)
Accrued expenses	5,351	648
Accrued interest	(919)	1,550
Accrued salaries and wages	(19,547)	(22,220)
Gaming, pari-mutuel, property and other taxes	(6,544)	(4,920)
Income taxes	10,090	23,515
Other current and noncurrent liabilities	(4,430)	(7,065)
Net cash provided by operating activities	66,820	72,022
Investing activities
Project capital expenditures, net of reimbursements	(6,178)	(6,496)
Maintenance capital expenditures	(10,978)	(14,873)
Proceeds for insurance claim	577
Advances to the Jamul Tribe		(51,781)
Delayed draw term loan C commitments with Jamul Tribe	(168)
Proceeds from sale of property and equipment and assets held for sale	309	2,091
Increase in cash in escrow	(4,432)
Acquisition of businesses and other licenses	(2,441)	(148)
Net cash used in investing activities	(23,311)	(71,207)
Financing activities
Proceeds from exercise of options	612	1,742
Repurchase of common stock	(5,794)
Principal payments on financing obligation with GLPI	(14,785)	(12,648)
Proceeds from issuance of long-term debt, net of issuance costs	1,359,710	12,214
Principal payments on long-term debt	(1,330,719)	(23,404)
Payments of other long-term obligations	(28,033)	(6,899)
Payments of contingent purchase price	(21)
Proceeds from insurance financing	8,768	9,193
Payments on insurance financing	(3,269)	(3,784)
Net cash used in financing activities	(13,531)	(23,586)
Net increase (decrease) in cash and cash equivalents	29,978	(22,771)
Cash and cash equivalents at beginning of year	229,510	237,009
Cash and cash equivalents at end of year	259,488	214,238
Supplemental disclosure
Interest expense paid, net of amounts capitalized	113,825	113,629
Income tax refunds received	(9,303)	(12,481)
Non-cash investing and financing activities
Accrued capital expenditures	9,279	5,795
Accrued advances to Jamul Tribe	1,103	$ 36,914
Accrued debt issuance costs	$ 828

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

XBRL-Only Content Section

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 (“OTWs’).

Revenue from our management service contracts for Casino Rama and Hollywood Casino Jamul – San Diego are based upon contracted terms and are recognized when services are performed and collection is reasonably assured.

The Company records revenues generated from its management service contract and licensing contract with the Jamul Tribe, as well as interest income associated with advances to the Jamul Tribe in accordance with ASC 605-25 “Multiple Element Arrangements.” The fair value of each arrangement element is based on the separate standalone selling price determined by either vendor-specific objective evidence (“VSOE”), if available, or third-party evidence ("TPE") if VSOE is not available. We concluded revenues generated with respect to each element contained within the arrangement is representative of the separate standalone selling price which is reflective of fair value.

Revenues include reimbursable costs associated with the Company’s management contract with Jamul Indian Village of California (the “Jamul Tribe”), which represent amounts received or due pursuant to the Company’s management agreement for the reimbursement of expenses, primarily payroll costs, incurred on their behalf. The Company recognizes the reimbursable costs associated with this contract as revenue on a gross basis, with an offsetting amount charged to operating expense as it is the primary obligor for these costs.

Revenues are recognized net of certain sales incentives in accordance with 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, 2017 and 2016 are as follows:


	Three Months Ended March 31,
	2017		2016
	(in thousands)
Rooms	$	9,196	$	9,122
Food and beverage		30,566		29,521
Other		2,096		1,928
Total promotional allowances	$	41,858	$	40,571

The estimated cost of providing such complimentary services for the three months ended March 31, 2017 and 2016 are as follows:


	Three Months Ended March 31,
	2017		2016
	(in thousands)
Rooms	$	1,268	$	1,197
Food and beverage		11,631		11,523
Other		854		745
Total cost of complimentary services	$	13,753	$	13,465

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. For the three months ended March 31, 2017, these expenses, which are recorded primarily within gaming expense in the condensed consolidated statements of income, were $244.4 million, as compared to $243.2 million for the three months ended March 31, 2016.

Long-term asset related to the Jamul Tribe

The Company is accounting for the development agreement and related loan commitment letter with the Jamul Tribe as a loan (the “Loan”) with accrued interest in accordance with ASC 310, “Receivables.” The Loan represented advances made by the Company to the Jamul Tribe for the development and construction of a gaming facility for the Jamul Tribe on reservation land. As such, the Jamul Tribe owns the casino and its related assets and liabilities. Repayment of funds advanced to the Jamul Tribe is primarily predicated on cash flows from the operations of the facility. San Diego Gaming Ventures, LLC (“SDGV”) (a wholly-owned subsidiary of the Company) is a separate legal entity and is the Penn entity that has the Loan with and is entitled to receive management and licensing fees from the Jamul Tribe.

Additionally, in December 2015, the Company entered into an agreement to purchase a $60 million subordinated note from the previous developer of the Jamul Indian Village project for $24 million. Interest on this subordinated note, as of the effective date and at all times thereafter until the Loan has been paid in full, shall accrue as follows: as of the effective date, no interest shall accrue initially; at the opening date, interest shall accrue at a simple fixed rate of 4.25% per annum. The subordinated note is subordinated to the Loan, and payments on the subordinated note may only be made after all necessary payments are made on the Loan subject to certain limitations. The Company recorded the subordinated note at its acquisition price of $24 million, which was considered to be its fair value and represents the expected cash flows to be received. As described below, this subordinated note was repaid in connection with the Jamul Tribe refinancing of its existing indebtedness and the Company received a $6 million premium on such repayment which was accounted for as an origination fee on our new loan to the Tribe.

On October 20, 2016, the Jamul Tribe obtained long term secured financing, consisting of revolving and term loan credit facilities (the “Credit Facilities”) totaling approximately $460 million. The Credit Facilities, all of which are due in 2022, consist of a $5 million revolving credit facility, a $340 million term loan B facility and a $98 million term loan C facility. The revolving credit facility was provided by various commercial banks; the term loan B facility is held by an affiliate of Och-Ziff Real Estate; and the term loan C facility is held by SDGV. SDGV will also provide up to an additional $15 million of delayed draw term loan C commitments to fund certain roadway improvement costs. The various Credit Facilities rank pari passu with each other. However, if, on the first anniversary of the opening of Hollywood Casino Jamul – San Diego, the Jamul Tribe has not achieved a senior secured net leverage ratio equal to or less than 5.0 to 1.0, then all or a portion of the term loan C facility will become subordinated to the other Credit Facilities to the extent necessary such that, after giving effect to such conversion, such senior secured net leverage ratio is 5.0 to 1.0. The rights of SDGV to receive management and license fees are subordinated to the claims of the lenders under the Credit Facilities and are subject to certain conditions contained in the Credit Facilities. SDGV’s Loan with the Jamul Tribe totaled $92.3 million (net of unamortized loan origination fees of $5.9 million and inclusive of a current portion of $0.5 million in other current assets) and $92.1 million (net of unamortized loan origination fee of $5.9 million and inclusive of a current portion of $0.7 million in other current assets) at March 31, 2017 and December 31, 2016, respectively.

As a condition to the Credit Facilities, SDGV provided a limited completion guarantee, in favor of the administrative agent under the Credit Facilities, to provide up to $15 million of additional loans related to the construction and opening of the Casino, as well as certain post opening construction costs. Of these loans, $10 million may be funded under the Credit Facilities as part of the term loan C facility, while any additional loans would be subordinated loans. The term loan C facility bears interest at LIBOR plus 8.50% with a 1% LIBOR floor (or, at the Jamul Tribe’s election, a base rate determined by reference to the prime rate, the federal funds effective rate or LIBOR, as applicable, plus 8.50%), and the subordinated loans will bear interest at 14.0% (with 12.0% to be paid in cash and 2.0% to be paid-in-kind).

As mentioned previously, the Company is accounting for its loan in accordance with ASC 310, “Receivables”. Although Hollywood Casino Jamul San-Diego opened to strong business and earnings volumes in October 2016, which met our expectations, results began to soften earlier and with a steeper dropoff than anticipated. Based on the actual performance of the facility to date and projections for the second quarter of 2017, the Company believes the Jamul Tribe is likely to be in technical default of certain financial covenant requirements with respect to debt to earnings ratios at June 30, 2017, in the absence of a waiver being obtained prior to such date. As a result, we have concluded the Loan is impaired at both March 31, 2017 and December 31, 2016. A loan is considered impaired when, based on current information, events and projections, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when contractually due under the terms of the loan agreement. Impairment is measured by the present value of expected future cash flows discounted at the loan’s effective interest rate. An allowance for loan losses would be established in the event the carrying value exceeds the present value calculation previously described.

The Company performed a comprehensive review of various possible future cash flow projections for the facility that were benchmarked against recent openings in the Company’s regional operations. The expected cash flows were then discounted at the Loan’s original interest rate in accordance with ASC 310 which was in excess of our Loan’s carrying value at both March 31, 2017 and December 31, 2016, and as such no reserve was required. The unpaid principal balance of our loan at March 31, 2017 and December 31, 2016 was $98.2 million and $98.0 million, respectively.

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.

As of March 31, 2017, there were no outstanding shares of Series C Preferred Stock. At March 31, 2016, 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, 2017 and 2016 under the two-class method:


	Three Months Ended March 31,		Three Months Ended March 31,
	2017		2016
	(in thousands)

Net income	$	5,104	$	23,708
Net income applicable to preferred stock		—		2,282
Net income applicable to common stock	$	5,104	$	21,426

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, 2017 and 2016:


	Three Months Ended March 31,	Three Months Ended March 31,
	2017	2016
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	90,751	80,968
Assumed conversion of dilutive employee stock-based awards	1,105	1,448
Assumed conversion of restricted stock	61	51
Diluted weighted-average common shares outstanding before participating security	91,917	82,467
Assumed conversion of preferred stock	—	8,624
Diluted weighted-average common shares outstanding	91,917	91,091

Options to purchase 4,545,585 shares and 2,574,719 shares were outstanding during the three months ended March 31, 2017 and 2016, 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 for the three months ended March 31, 2017 and 2016 (in thousands, except per share data):


	Three Months Ended March 31,		Three Months Ended March 31,
	2017		2016
Calculation of basic EPS:
Net income applicable to common stock	$	5,104	$	21,426
Weighted-average common shares outstanding		90,751		80,968
Basic EPS	$	0.06	$	0.26

Calculation of diluted EPS using two-class method:
Net income applicable to common stock	$	5,104	$	21,426
Diluted weighted-average common shares outstanding before participating security		91,917		82,467
Diluted EPS	$	0.06	$	0.26

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 is 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 5.30 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 1,446,353 stock options during the three months ended March 31, 2017.

Stock-based compensation expense for the three months ended March 31, 2017 was $2.2 million as compared to $1.5 million for the three months ended March 31, 2016, 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 $5.8 million and $5.6 million at March 31, 2017 and December 31, 2016, respectively. For PSUs held by Penn employees, there was $7.1 million of total unrecognized compensation cost at March 31, 2017 that will be recognized over the grants remaining weighted average vesting period of 2.07 years. For the three months ended March 31, 2017, the Company recognized $4.3 million of compensation expense associated with these awards, as compared to $3.0 million for the three months ended March 31, 2016. The changes are primarily due to volatility in Penn’s stock price year-over-year. Amounts paid by the Company for the three months ended March 31, 2017 on these cash-settled awards totaled $3.5 million as compared to $4.4 million for the three months ended March 31, 2016.

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 $10.4 million and $7.3 million at March 31, 2017 and December 31, 2016, respectively. For SARs held by Penn employees, there was $11.2 million of total unrecognized compensation cost at March 31, 2017 that will be recognized over the awards remaining weighted average vesting period of 2.99 years. For the three months ended March 31, 2017, the Company recognized compensation expense of $4.0 million associated with these awards, as compared to $1.9 million for the three months ended March 31, 2016. The changes are primarily due to volatility in Penn’s stock price year-over-year. Amounts paid by the Company for the three months ended March 31, 2017 on these cash-settled awards totaled $1.1 million as compared to $0.4 million for the three months ended March 31, 2016.

The following are the weighted-average assumptions used in the Black-Scholes option-pricing model for stock option awards granted during the three months ended March 31, 2017 and 2016, respectively:



Three months ended March 31,	2017		2016
Risk-free interest rate	1.97	%	1.20	%
Expected volatility	30.67	%	31.22	%
Dividend yield	—		—
Weighted-average expected life (years)	5.30		5.40

Segment Information

The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), 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. During the second quarter of 2016, the Company changed its three reportable segments from East/Midwest, West and Southern Plains to Northeast, South/West, and Midwest in connection with the addition of a new regional vice president and a realignment of responsibilities within our segments. This realignment changed the manner in which information is provided to the CODM and therefore how performance is assessed and resources are allocated to the business. Segment information for prior periods has been restated for comparability.

The Northeast 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 Toledo, Hollywood Casino Columbus, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course, and Plainridge Park Casino. It also includes the Company’s Casino Rama management service contract.

The South/West reportable segment consists of the following properties: Zia Park Casino, Hollywood Casino Tunica, Hollywood Casino Gulf Coast, Boomtown Biloxi, M Resort, and Tropicana Las Vegas, as well as our management contract with Hollywood Casino Jamul-San Diego, which opened on October 10, 2016.

The Midwest reportable segment consists of the following properties: Hollywood Casino Aurora, Hollywood Casino Joliet, Argosy Casino Alton, Argosy Casino Riverside, Hollywood Casino Lawrenceburg, Hollywood Casino St. Louis, and Prairie State Gaming, 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, which was sold on July 31, 2016, 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. Additionally, the Other category includes Penn Interactive Ventures, the Company’s wholly-owned subsidiary that represents its social online gaming initiatives, including the recently acquired Rocket Speed. Penn Interactive Ventures meets the definition of an operating segment under ASC 280, but is quantitatively not significant to the Company’s operations as it represents 1.5% of net revenues and $(1.4) million impact to income from operations for the three months ended March 31, 2017, and its total assets represent 2.2% of the Company’s total assets at March 31, 2017.

In addition to GAAP financial measures, management uses adjusted EBITDA as an important 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 it provides 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 and financing charges, impairment charges, insurance recoveries and deductible charges, depreciation and amortization, changes in the estimated fair value of our contingent purchase price obligations, 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.

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, 2017 and 2016, the only component of accumulated other comprehensive income was foreign currency translation adjustments.

Property and Equipment

3 Months Ended

Mar. 31, 2017

Property and Equipment

Property and Equipment

4. Property and Equipment

Property and equipment, net, consists of the following:


	March 31,		December 31,
	2017		2016
	(in thousands)

Property and equipment - non-master lease
Land and improvements	$	294,590	$	294,590
Building and improvements		404,875		404,158
Furniture, fixtures and equipment		1,358,002		1,355,615
Leasehold improvements		119,404		118,940
Construction in progress		26,903		16,375
		2,203,774		2,189,678
Less Accumulated depreciation		(1,261,519)		(1,224,596)
		942,255		965,082
Property and equipment - master lease
Land and improvements		381,680		382,246
Building and improvements		2,219,017		2,219,018
		2,600,697		2,601,264
Less accumulated depreciation		(768,629)		(745,963)
		1,832,068		1,855,301
Property and equipment, net	$	2,774,323	$	2,820,383

Property and equipment, net decreased by $46.1 million for the three months ended March 31, 2017 primarily due to depreciation expense, which is partially offset by improvements at Tropicana Las Vegas, and normal maintenance capital expenditures for the three months ended March 31, 2017.

Depreciation expense, for property and equipment including assets under capital leases, totaled $65.0 million and $65.6 million for the three months ended March 31, 2017 and 2016, respectively, of which $22.7 million and $22.9 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, 2017 and 2016.

Long-term Debt

3 Months Ended

Mar. 31, 2017

Long-term Debt

Long-term Debt

5. Long-term Debt

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


	March 31,		December 31,
	2017		2016
	(in thousands)

Senior secured credit facility	$	931,000	$	976,845
$300 million 5.875 % senior subordinated notes due November 1, 2021		—		300,000
$400 million 5.625 % senior unsecured notes due January 15, 2027		400,000		—
Other long-term obligations		126,052		154,084
Capital leases		1,321		1,760
		1,458,373		1,432,689
Less current maturities of long-term debt		(35,561)		(85,595)
Less net discounts		(2,937)		(620)
Less debt issuance costs		(32,333)		(16,535)
	$	1,387,542	$	1,329,939

The following is a schedule of future minimum repayments of long-term debt as of March 31, 2017 (in thousands):


Within one year	$	35,497
1-3 years		78,612
3-5 years		422,517
Over 5 years		921,747
Total minimum payments	$	1,458,373

Senior Secured Credit Facility

On January 19, 2017, the Company entered into a new senior secured credit facility. The new senior secured credit facility consists of a five year $700 million revolver, a five year $300 million Term Loan A facility, and a seven year $500 million Term Loan B facility (the “Amended Credit Facilities”). The Term Loan A facility was priced at LIBOR plus a spread (ranging from 3.00% to 1.25%) based on the Company’s consolidated total net leverage ratio as defined in the new senior secured credit facility. The Term Loan B facility was priced at LIBOR plus 2.50%, with a 0.75% LIBOR floor. At March 31, 2017, the Company’s senior secured credit facility had a gross outstanding balance of $931.0 million, consisting of a $300.0 million Term Loan A facility, a $500.0 million Term Loan B facility, and $131.0 million outstanding on the revolving credit facility. Additionally, at March 31, 2017, the Company had conditional obligations under letters of credit issued pursuant to the senior secured credit facility with face amounts aggregating $22.1 million, resulting in $546.9 million of available borrowing capacity as of March 31, 2017 under the revolving credit facility. In connection with the repayment of the previous senior secured credit facility, the Company recorded $1.7 million in refinancing costs and a $2.3 million loss on the early extinguishment of debt for the quarter ended March 31, 2017 related to the write-off of deferred debt issuance costs and the write‑off of the discount on the Term Loan B facility of the previous senior secured credit facility.

Redemption of 5.875% Senior Subordinated Notes

In the first quarter of 2017, the Company redeemed all of its $300 million 5.875% senior subordinated notes, which were due in 2021 (“5.875% Notes”). In connection with this redemption, the Company recorded a $21.1 million loss on the early extinguishment of debt for the quarter ended March 31, 2017 related to the difference between the reacquisition price of the 5.875% Notes compared to its carrying value.

5.625% Senior Unsecured Notes

On January 19, 2017, the Company completed an offering of $400 million 5.625% senior unsecured notes that mature on January 15, 2027 (the “5.625% Notes”) at a price of par. Interest on the 5.625% Notes is payable on January 15th and July 15th of each year. The 5.625% Notes are senior unsecured obligations of the Company. The 5.625% Notes will not be guaranteed by any of the Company’s subsidiaries except in the event that the Company in the future issues certain subsidiary‑guaranteed debt securities. The Company may redeem the 5.625% Notes at any time on or after January 15, 2022, at the declining redemption premiums set forth in the indenture governing the 5.625% Notes, and, prior to January 15, 2022, at a “make-whole” redemption premium set forth in the indenture governing the 5.625% Notes. In addition, prior to January 15, 2020, the Company may redeem the 5.625% Notes with an amount equal to the net proceeds from one or more equity offerings, at a redemption price equal to 105.625% of the principal amount of the 5.625% Notes redeemed, together with accrued and unpaid interest to, but not including, the redemption date, so long as at least 60% of the aggregate principal amount of the notes originally issued under the indenture remains outstanding and such redemption occurs within 180 days of closing of the related equity offering.

The Company used a portion of the proceeds from the issuance of the 5.625% Notes to retire its existing 5.875% Notes and to fund related transaction fees and expenses.

The Company used loans funded under the Amended Credit Facilities and a portion of the proceeds of the 5.625% Notes to repay amounts outstanding under its then existing Credit Agreement and to fund related transaction fees and expenses and for general corporate purposes.

Corporate Airplane Loan

In January 2017, the Company’s corporate airplane loan of $20.8 million was paid in full. At December 31, 2016 the corporate airplane loan was included with other long-term obligations.

Covenants

The Company’s senior secured credit facility and $400 million 5.625% senior unsecured notes require it, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests, including fixed charge coverage, interest coverage, senior leverage and total leverage ratios. In addition, the Company’s senior secured credit facility and $400 million 5.625% senior unsecured notes restrict, among other things, its ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities.

At March 31, 2017, the Company was in compliance with all required financial covenants.

Segment Information

3 Months Ended

Mar. 31, 2017

Segment Information

Segment Information

7. Segment Information

During the second quarter of 2016, the Company changed its three reportable segments from East/Midwest, West and Southern Plains to Northeast, South/West, and Midwest in connection with the addition of a new regional vice president and a realignment of responsibilities within the Company’s segments. Segment information for prior periods has been restated for comparability. 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, 2017	Northeast		South/West		Midwest		Other (1)		Total
Income (loss) from operations	$	102,633	$	27,118	$	61,529	$	(50,993)	$	140,287
Charge for stock compensation		—		—		—		2,173		2,173
Depreciation and amortization		23,023		9,218		9,671		28,324		70,236
Contingent purchase price		904		—		9		1,647		2,560
(Gain) loss on disposal of assets		14		5		(58)		(6)		(45)
Insurance recoveries		—		—		—		—		—
Income (loss) from unconsolidated affiliates		—		—		5,004		(456)		4,548
Non-operating items for Kansas JV		—		—		1,951		—		1,951
Adjusted EBITDA	$	126,574	$	36,341	$	78,106	$	(19,311)	$	221,710

Three months ended March 31, 2016	Northeast		South/West		Midwest		Other (1)		Total
Income (loss) from operations	$	100,921	$	25,985	$	58,225	$	(44,600)	$	140,531
Charge for stock compensation		—		—		—		1,455		1,455
Depreciation and amortization		22,994		8,764		9,568		24,694		66,020
Contingent purchase price		(1,201)		—		—		—		(1,201)
Loss on disposal of assets		21		(24)		6		(1,104)		(1,101)
Income (loss) from unconsolidated affiliates		—		—		4,718		(109)		4,609
Non-operating items for Kansas JV		—		—		2,570		—		2,570
Adjusted EBITDA	$	122,735	$	34,725	$	75,087	$	(19,664)	$	212,883


		Northeast		South/West		Midwest		Other (1)		Total
	(in thousands)
Three months ended March 31, 2017
Net revenues	$	393,465	$	139,820	$	228,338	$	14,601	$	776,224
Capital expenditures		3,990		8,622		4,331		213		17,156

Three months ended March 31, 2016
Net revenues	$	393,205	$	135,968	$	221,078	$	6,200	$	756,451
Capital expenditures		7,119		7,585		5,982		683		21,369

Balance sheet at March 31, 2017
Total assets	$	837,808	$	829,872	$	1,087,737	$	2,191,623	$	4,947,040
Investment in and advances to unconsolidated affiliates		76		—		93,022		61,876		154,974
Goodwill and other intangible assets, net		324,285		224,693		776,347		97,092		1,422,417

Balance sheet at December 31, 2016
Total assets	$	861,951	$	840,076	$	1,103,231	$	2,169,226	$	4,974,484
Investment in and advances to unconsolidated affiliates		76		—		93,768		62,332		156,176
Goodwill and other intangible assets, net		324,285		224,719		775,377		100,798		1,425,179

(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, which was sold on July 31, 2016, Sanford Orlando Kennel Club and the Company’s Texas and New Jersey joint ventures, which do not have gaming operations. Other also includes Penn Interactive Ventures, which is a wholly-owned subsidiary that is pursuing our interactive gaming strategy and our recent acquisition of Rocket Speed.

- 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
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599

+ Details

Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Measurements

Fair Value Measurements

8. 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 and as such is a Level 1 measurement.

Advances to the Jamul Tribe

The fair value of the Company’s advances to the Jamul Tribe was based on market interest rates for similarly rated observable instruments. Although we determined that these inputs fell within Level 2 of the fair value hierarchy, the probability of the Company’s loan being subordinated is based on internal projections of the cash flows of the facility which is a Level 3 measurement. Therefore, the Company concluded that this instrument should be classified as a Level 3 measurement due to the high probability of the loan being subordinated. See Note 2 for further details.

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, 2017, 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.

Other liabilities

Other liabilities at March 31, 2017 is primarily comprised of the contingent purchase price consideration related to the purchases of Plainridge Racecourse and Rocket Speed. 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. The fair value of the Company’s contingent purchase price consideration related to its Rocket Speed acquisition is estimated by applying an option pricing method using a Monte Carlo simulation which is a quantitative technique that estimates the distribution of an outcome variable that depends on probabilistic input variables and as such is a Level 3 measurement. At each reporting period, the Company assesses the fair value of these liabilities and changes in their fair values are recorded in earnings. The amount related to the change in fair value of these obligations resulted in a charge to general and administrative expense of $2.6 million for the three months ended March 31, 2017 compared to a reduction of $1.2 million for the three months ended March 31, 2016.

The carrying amounts and estimated fair values by input level of the Company’s financial instruments at March 31, 2017 and December 31, 2016 are as follows (in thousands):


	March 31, 2017
	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	259,488	$	259,488	$	259,488	$	—	$	—
Advances to Jamul Tribe		92,334		98,198		—		—		98,198
Financial liabilities:
Long-term debt
Senior secured credit facility		896,539		934,750		803,750		131,000		—
Senior unsecured notes		399,228		394,000		394,000		—		—
Other long-term obligations		126,052		124,424		—		124,424		—
Other liabilities		50,783		50,783		—		—		50,783


	December 31, 2016
	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	229,510	$	229,510	$	229,510	$	—	$	—
Advances to Jamul Tribe		92,100		98,000		—		—		98,000
Financial liabilities:
Long-term debt
Senior secured credit facility		962,703		976,092		785,092		191,000		—
Senior unsecured notes		296,895		312,000		312,000		—		—
Other long-term obligations		154,084		152,132		—		152,132		—
Other liabilities		48,244		48,244		—		—		48,244

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


	Three Months Ended
	March 31, 2017
	Liabilities
	Contingent
	Purchase Price
Balance at January 1, 2017	$	48,244

Additions		—
Payments		(21)
Included in earnings		2,560
Balance at March 31, 2017	$	50,783

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


	Valuation	Unobservable
	Technique	Input	Discount Rate		Volatility Rate
Contingent purchase price - Plainridge	Discounted cash flow	Discount rate	8.30	%	N/A	%
Contingent purchase price - Rocket Speed	Option pricing method	Discount rate, Volatility rate	12.00	%	83.11	%

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Summary of Significant Accounting Policies

Revenue Recognition and Promotional Allowances

The amounts included in promotional allowances for the three months ended March 31, 2017 and 2016 are as follows:


	Three Months Ended March 31,
	2017		2016
	(in thousands)
Rooms	$	9,196	$	9,122
Food and beverage		30,566		29,521
Other		2,096		1,928
Total promotional allowances	$	41,858	$	40,571

The estimated cost of providing such complimentary services for the three months ended March 31, 2017 and 2016 are as follows:


	Three Months Ended March 31,
	2017		2016
	(in thousands)
Rooms	$	1,268	$	1,197
Food and beverage		11,631		11,523
Other		854		745
Total cost of complimentary services	$	13,753	$	13,465

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, 2017 and 2016 under the two-class method:


	Three Months Ended March 31,		Three Months Ended March 31,
	2017		2016
	(in thousands)

Net income	$	5,104	$	23,708
Net income applicable to preferred stock		—		2,282
Net income applicable to common stock	$	5,104	$	21,426


	Three Months Ended March 31,	Three Months Ended March 31,
	2017	2016
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	90,751	80,968
Assumed conversion of dilutive employee stock-based awards	1,105	1,448
Assumed conversion of restricted stock	61	51
Diluted weighted-average common shares outstanding before participating security	91,917	82,467
Assumed conversion of preferred stock	—	8,624
Diluted weighted-average common shares outstanding	91,917	91,091

The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2017 and 2016 (in thousands, except per share data):


	Three Months Ended March 31,		Three Months Ended March 31,
	2017		2016
Calculation of basic EPS:
Net income applicable to common stock	$	5,104	$	21,426
Weighted-average common shares outstanding		90,751		80,968
Basic EPS	$	0.06	$	0.26

Calculation of diluted EPS using two-class method:
Net income applicable to common stock	$	5,104	$	21,426
Diluted weighted-average common shares outstanding before participating security		91,917		82,467
Diluted EPS	$	0.06	$	0.26

Stock-Based Compensation

The following are the weighted-average assumptions used in the Black-Scholes option-pricing model for stock option awards granted during the three months ended March 31, 2017 and 2016, respectively:



Three months ended March 31,	2017		2016
Risk-free interest rate	1.97	%	1.20	%
Expected volatility	30.67	%	31.22	%
Dividend yield	—		—
Weighted-average expected life (years)	5.30		5.40

Segment Information

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

Other Comprehensive Income

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2017

Summary of Significant Accounting Policies

Schedule of promotional allowances


	Three Months Ended March 31,
	2017		2016
	(in thousands)
Rooms	$	9,196	$	9,122
Food and beverage		30,566		29,521
Other		2,096		1,928
Total promotional allowances	$	41,858	$	40,571

Schedule of estimated cost of providing complimentary services


	Three Months Ended March 31,
	2017		2016
	(in thousands)
Rooms	$	1,268	$	1,197
Food and beverage		11,631		11,523
Other		854		745
Total cost of complimentary services	$	13,753	$	13,465

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


	Three Months Ended March 31,		Three Months Ended March 31,
	2017		2016
	(in thousands)

Net income	$	5,104	$	23,708
Net income applicable to preferred stock		—		2,282
Net income applicable to common stock	$	5,104	$	21,426

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,	Three Months Ended March 31,
	2017	2016
	(in thousands)
Determination of shares:
Weighted-average common shares outstanding	90,751	80,968
Assumed conversion of dilutive employee stock-based awards	1,105	1,448
Assumed conversion of restricted stock	61	51
Diluted weighted-average common shares outstanding before participating security	91,917	82,467
Assumed conversion of preferred stock	—	8,624
Diluted weighted-average common shares outstanding	91,917	91,091

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

The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three months ended March 31, 2017 and 2016 (in thousands, except per share data):


	Three Months Ended March 31,		Three Months Ended March 31,
	2017		2016
Calculation of basic EPS:
Net income applicable to common stock	$	5,104	$	21,426
Weighted-average common shares outstanding		90,751		80,968
Basic EPS	$	0.06	$	0.26

Calculation of diluted EPS using two-class method:
Net income applicable to common stock	$	5,104	$	21,426
Diluted weighted-average common shares outstanding before participating security		91,917		82,467
Diluted EPS	$	0.06	$	0.26

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



Three months ended March 31,	2017		2016
Risk-free interest rate	1.97	%	1.20	%
Expected volatility	30.67	%	31.22	%
Dividend yield	—		—
Weighted-average expected life (years)	5.30		5.40

Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2017

Long-term Debt

Schedule of long-term debt, net of current maturities


	March 31,		December 31,
	2017		2016
	(in thousands)

Senior secured credit facility	$	931,000	$	976,845
$300 million 5.875 % senior subordinated notes due November 1, 2021		—		300,000
$400 million 5.625 % senior unsecured notes due January 15, 2027		400,000		—
Other long-term obligations		126,052		154,084
Capital leases		1,321		1,760
		1,458,373		1,432,689
Less current maturities of long-term debt		(35,561)		(85,595)
Less net discounts		(2,937)		(620)
Less debt issuance costs		(32,333)		(16,535)
	$	1,387,542	$	1,329,939

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, 2017 (in thousands):


Within one year	$	35,497
1-3 years		78,612
3-5 years		422,517
Over 5 years		921,747
Total minimum payments	$	1,458,373

- 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 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 2: 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

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 4: 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.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: 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=64930785&loc=d3e28541-108399

Reference 9: 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=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

+ Details

Segment Information (Tables)

3 Months Ended

Mar. 31, 2017

Segment Information

Schedule of information with respect to the Company's segments


Three months ended March 31, 2017	Northeast		South/West		Midwest		Other (1)		Total
Income (loss) from operations	$	102,633	$	27,118	$	61,529	$	(50,993)	$	140,287
Charge for stock compensation		—		—		—		2,173		2,173
Depreciation and amortization		23,023		9,218		9,671		28,324		70,236
Contingent purchase price		904		—		9		1,647		2,560
(Gain) loss on disposal of assets		14		5		(58)		(6)		(45)
Insurance recoveries		—		—		—		—		—
Income (loss) from unconsolidated affiliates		—		—		5,004		(456)		4,548
Non-operating items for Kansas JV		—		—		1,951		—		1,951
Adjusted EBITDA	$	126,574	$	36,341	$	78,106	$	(19,311)	$	221,710

Three months ended March 31, 2016	Northeast		South/West		Midwest		Other (1)		Total
Income (loss) from operations	$	100,921	$	25,985	$	58,225	$	(44,600)	$	140,531
Charge for stock compensation		—		—		—		1,455		1,455
Depreciation and amortization		22,994		8,764		9,568		24,694		66,020
Contingent purchase price		(1,201)		—		—		—		(1,201)
Loss on disposal of assets		21		(24)		6		(1,104)		(1,101)
Income (loss) from unconsolidated affiliates		—		—		4,718		(109)		4,609
Non-operating items for Kansas JV		—		—		2,570		—		2,570
Adjusted EBITDA	$	122,735	$	34,725	$	75,087	$	(19,664)	$	212,883


		Northeast		South/West		Midwest		Other (1)		Total
	(in thousands)
Three months ended March 31, 2017
Net revenues	$	393,465	$	139,820	$	228,338	$	14,601	$	776,224
Capital expenditures		3,990		8,622		4,331		213		17,156

Three months ended March 31, 2016
Net revenues	$	393,205	$	135,968	$	221,078	$	6,200	$	756,451
Capital expenditures		7,119		7,585		5,982		683		21,369

Balance sheet at March 31, 2017
Total assets	$	837,808	$	829,872	$	1,087,737	$	2,191,623	$	4,947,040
Investment in and advances to unconsolidated affiliates		76		—		93,022		61,876		154,974
Goodwill and other intangible assets, net		324,285		224,693		776,347		97,092		1,422,417

Balance sheet at December 31, 2016
Total assets	$	861,951	$	840,076	$	1,103,231	$	2,169,226	$	4,974,484
Investment in and advances to unconsolidated affiliates		76		—		93,768		62,332		156,176
Goodwill and other intangible assets, net		324,285		224,719		775,377		100,798		1,425,179

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

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, 2017 and December 31, 2016 are as follows (in thousands):


	March 31, 2017
	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	259,488	$	259,488	$	259,488	$	—	$	—
Advances to Jamul Tribe		92,334		98,198		—		—		98,198
Financial liabilities:
Long-term debt
Senior secured credit facility		896,539		934,750		803,750		131,000		—
Senior unsecured notes		399,228		394,000		394,000		—		—
Other long-term obligations		126,052		124,424		—		124,424		—
Other liabilities		50,783		50,783		—		—		50,783


	December 31, 2016
	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	229,510	$	229,510	$	229,510	$	—	$	—
Advances to Jamul Tribe		92,100		98,000		—		—		98,000
Financial liabilities:
Long-term debt
Senior secured credit facility		962,703		976,092		785,092		191,000		—
Senior unsecured notes		296,895		312,000		312,000		—		—
Other long-term obligations		154,084		152,132		—		152,132		—
Other liabilities		48,244		48,244		—		—		48,244

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, 2017
	Liabilities
	Contingent
	Purchase Price
Balance at January 1, 2017	$	48,244

Additions		—
Payments		(21)
Included in earnings		2,560
Balance at March 31, 2017	$	50,783

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


	Valuation	Unobservable
	Technique	Input	Discount Rate		Volatility Rate
Contingent purchase price - Plainridge	Discounted cash flow	Discount rate	8.30	%	N/A	%
Contingent purchase price - Rocket Speed	Option pricing method	Discount rate, Volatility rate	12.00	%	83.11	%

Summary of Significant Accounting Policies - Financing Extended to Jamul Tribe (Details) - Jamul Tribe - USD ($) $ in Millions		3 Months Ended	12 Months Ended
	Oct. 20, 2016	Mar. 31, 2017	Dec. 31, 2016
Loan Receivable
Unamortized financing loan origination fee	$ 6.0
Term Loan C Facility \| San Diego Gaming Ventures
Loan Receivable
Financing loan receivable, carrying value		$ 92.3	$ 92.1
Unamortized financing loan origination fee		5.9	5.9
Additional borrowing capacity under the financing facility	10.0
Financing loan receivable, reserve allowance		0.0	0.0
Financing loan receivable, unpaid principal balance		98.2	98.0
Delayed Draw Term Loan C Facility Commitments \| San Diego Gaming Ventures \| Maximum
Loan Receivable
Additional borrowing capacity under the financing facility	$ 15.0
Subordinated Loans \| San Diego Gaming Ventures
Loan Receivable
Financing interest rate margin - Rate two (as a percent)	14.00%
Portion of contract financing interest rate to be paid in cash (as a percent)	12.00%
Portion of contract interest rate to be paid-in-kind (as a percent)	2.00%
LIBOR \| Term Loan C Facility \| San Diego Gaming Ventures
Loan Receivable
Financing variable rate basis	LIBOR
Financing interest rate margin (as a percent)	8.50%
Financing variable rate basis floor (as a percent)	1.00%
Prime Rate \| Term Loan C Facility \| San Diego Gaming Ventures
Loan Receivable
Financing variable rate basis	prime rate
Financing interest rate margin (as a percent)	8.50%
Federal Funds Effective Rate \| Term Loan C Facility \| San Diego Gaming Ventures
Loan Receivable
Financing variable rate basis	federal funds
Financing interest rate margin (as a percent)	8.50%
Other current assets \| Term Loan C Facility \| San Diego Gaming Ventures
Loan Receivable
Current portion of financing note receivable		$ 0.5	$ 0.7

Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Net income loss available to common stockholders
Net income	$ 5,104	$ 23,708
Net income applicable to preferred stock		2,282
Net income applicable to common stock	$ 5,104	$ 21,426
Determination of shares:
Weighted-average common shares outstanding (in shares)	90,751,000	80,968,000
Assumed conversion of dilutive employee stock-based awards (in shares)	1,105,000	1,448,000
Assumed conversion of restricted stock (in shares)	61,000	51,000
Diluted weighted-average common shares outstanding before participating security	91,917,000	82,467,000
Assumed conversion of preferred stock (in shares)		8,624,000
Diluted weighted-average common shares outstanding (in shares)	91,917,000	91,091,000
Calculation of basic EPS:
Net income applicable to common stock	$ 5,104	$ 21,426
Weighted-average common shares outstanding (in shares)	90,751,000	80,968,000
Basic EPS (in dollars per share)	$ 0.06	$ 0.26
Calculation of diluted EPS using two class method:
Net income applicable to common stock	$ 5,104	$ 21,426
Diluted weighted-average common shares outstanding before participating security	91,917,000	82,467,000
Diluted EPS (in dollars per share)	$ 0.06	$ 0.26
Anti-dilutive securities, options to purchase shares outstanding	4,545,585	2,574,719
Series C Preferred Stock
Earnings Per Share
Preferred stock, shares outstanding	0	8,624	0

Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Stock-based compensation costs
Time period of historical volatility of stock used to estimate expected volatility	5 years 3 months 18 days
Dividend yield (as a percent)	0.00%
Granted (in shares)	1,446,353
Accrued salaries and wages	$ 72,691		$ 92,238
Weighted-average assumptions used in the Black-Scholes option-pricing model
Risk-free interest rate (as a percent)	1.97%	1.20%
Expected volatility (as a percent)	30.67%	31.22%
Dividend yield (as a percent)	0.00%
Weighted-average expected life	5 years 3 months 18 days	5 years 4 months 24 days
Employee stock options \| General and administrative expenses
Stock-based compensation costs
Compensation costs related to stock-based compensation	$ 2,200	$ 1,500
Phantom Share Units (PSUs)
Stock-based compensation costs
Compensation costs related to stock-based compensation	4,300	3,000
Accrued salaries and wages	5,800		5,600
Total compensation cost related to nonvested awards not yet recognized	$ 7,100
Period for recognition of unrecognized compensation cost	2 years 26 days
Amounts paid on cash settled awards	$ 3,500	4,400
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
Compensation costs related to stock-based compensation	$ 4,000	1,900
Accrued salaries and wages	10,400		$ 7,300
Total compensation cost related to nonvested awards not yet recognized	$ 11,200
Period for recognition of unrecognized compensation cost	2 years 11 months 27 days
Amounts paid on cash settled awards	$ 1,100	$ 400

Long-term Debt - Senior Secured Credit Facility and Senior Notes (Details) - USD ($)		1 Months Ended	3 Months Ended
	Jan. 19, 2017	Jan. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Long-term Debt
Loss on early extinguishment of debt			$ 23,390,000
Long-term debt			1,458,373,000	$ 1,432,689,000
Senior Secured Credit Facility
Long-term Debt
Refinancing costs			1,700,000
Loss on early extinguishment of debt			2,300,000
Term loan amount outstanding			931,000,000
Long-term debt			931,000,000	976,845,000
Revolving credit facility
Long-term Debt
Term of debt	5 years
Maximum borrowing capacity	$ 700,000,000
Available borrowing capacity			546,900,000
Term loan amount outstanding			131,000,000
Letters of credit outstanding			22,100,000
Term Loan A Facility
Long-term Debt
Term of debt	5 years
Maximum borrowing capacity	$ 300,000,000
Variable interest rate	LIBOR
Term loan amount outstanding			300,000,000
Term Loan B Facility
Long-term Debt
Term of debt	7 years
Maximum borrowing capacity	$ 500,000,000
Variable interest rate	LIBOR
Variable interest rate spread (as a percent)	2.50%
Variable interest base rate floor rate (as a percent)	0.75%
Term loan amount outstanding			500,000,000
Senior Subordinated Notes, 5.875 Percent, Due November 2021
Long-term Debt
Loss on early extinguishment of debt			21,100,000
Long-term debt				300,000,000
Amount of debt extinguished			$ 300,000,000
Principal amount				$ 300,000,000
Interest rate (as a percent)			5.875%	5.875%
Senior Unsecured Notes 5.625 Percent Due January 15, 2027
Long-term Debt
Long-term debt			$ 400,000,000
Principal amount	$ 400,000,000		$ 400,000,000
Interest rate (as a percent)	5.625%		5.625%
Percentage of principal amount at which the entity may redeem notes from net proceeds raised in connection with an equity offering	105.625%
Percentage of the aggregate principal amount of the notes originally issued which must remain outstanding at redemption under terms of the notes	60.00%
Period from completion of equity offering, during which notes can be redeemed	180 days
Corporate airplane loan
Long-term Debt
Amount of debt extinguished		$ 20,800,000
Minimum \| Term Loan A Facility
Long-term Debt
Variable interest rate spread (as a percent)	1.25%
Maximum \| Term Loan A Facility
Long-term Debt
Variable interest rate spread (as a percent)	3.00%

Segment Information (Details) $ in Thousands	3 Months Ended
Segment Information (Details) $ in Thousands	Mar. 31, 2017 USD ($) segment	Jun. 30, 2016 segment	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Segment information
Number of reportable segments \| segment	3	3
Income (loss) from operations	$ 140,287		$ 140,531
Charge for stock compensation	2,173		1,455
Depreciation and amortization	70,236		66,020
Contingent purchase price	2,560		(1,201)
Loss (gain) loss on disposal of assets	(45)		(1,101)
Income from unconsolidated affiliates	4,548		4,609
Adjusted EBITDA	221,710		212,883
Net revenues	776,224		756,451
Capital expenditures	17,156		21,369
Total assets	4,947,040			$ 4,974,484
Investment in and advances to unconsolidated affiliates	154,974			156,176
Goodwill and other intangible assets, net	1,422,417			1,425,179
Kansas Entertainment
Segment information
Non-operating items	1,951		2,570
Operating Segments \| Northeast
Segment information
Income (loss) from operations	102,633		100,921
Depreciation and amortization	23,023		22,994
Contingent purchase price	904		(1,201)
Loss (gain) loss on disposal of assets	14		21
Adjusted EBITDA	126,574		122,735
Net revenues	393,465		393,205
Capital expenditures	3,990		7,119
Total assets	837,808			861,951
Investment in and advances to unconsolidated affiliates	76			76
Goodwill and other intangible assets, net	324,285			324,285
Operating Segments \| South/West
Segment information
Income (loss) from operations	27,118		25,985
Depreciation and amortization	9,218		8,764
Loss (gain) loss on disposal of assets	5		(24)
Adjusted EBITDA	36,341		34,725
Net revenues	139,820		135,968
Capital expenditures	8,622		7,585
Total assets	829,872			840,076
Goodwill and other intangible assets, net	224,693			224,719
Operating Segments \| Midwest
Segment information
Income (loss) from operations	61,529		58,225
Depreciation and amortization	9,671		9,568
Contingent purchase price	9
Loss (gain) loss on disposal of assets	(58)		6
Income from unconsolidated affiliates	5,004		4,718
Adjusted EBITDA	78,106		75,087
Net revenues	228,338		221,078
Capital expenditures	4,331		5,982
Total assets	1,087,737			1,103,231
Investment in and advances to unconsolidated affiliates	93,022			93,768
Goodwill and other intangible assets, net	776,347			775,377
Operating Segments \| Midwest \| Kansas Entertainment
Segment information
Non-operating items	1,951		2,570
Other
Segment information
Income (loss) from operations	(50,993)		(44,600)
Charge for stock compensation	2,173		1,455
Depreciation and amortization	28,324		24,694
Contingent purchase price	1,647
Loss (gain) loss on disposal of assets	(6)		(1,104)
Income from unconsolidated affiliates	(456)		(109)
Adjusted EBITDA	(19,311)		(19,664)
Net revenues	14,601		6,200
Capital expenditures	213		$ 683
Total assets	2,191,623			2,169,226
Investment in and advances to unconsolidated affiliates	61,876			62,332
Goodwill and other intangible assets, net	$ 97,092			$ 100,798

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Hollywood Gaming at Dayton Raceway And Mahoning Valley Race Course
Fair value of assets and liabilities
Discount Rate	5.00%
Contingent Purchase Price \| Plainridge Racecourse
Fair value of assets and liabilities
Charge (reduction) to general and administrative expense related to change in fair value measurement of contingent obligations	$ 2,600	$ (1,200)
Level 1
Financial assets:
Cash and cash equivalents	259,488		$ 229,510
Level 3
Financial assets:
Advances to Jamul Tribe	98,198		98,000
Financial liabilities:
Other liabilities	50,783		48,244
Level 3 \| Contingent Purchase Price
Financial liabilities:
Balance at beginning of the period	48,244
Total (gains) (realized or unrealized):
Payments	(21)
Included in earnings	2,560
Balance at end of the period	$ 50,783
Level 3 \| Contingent Purchase Price \| Discounted Cash Flow \| Plainridge Racecourse
Fair value of assets and liabilities
Discount Rate	8.30%
Level 3 \| Contingent Purchase Price \| Option Pricing Method \| Rocket Speed
Fair value of assets and liabilities
Discount Rate	12.00%
Volatility rate	83.11%
Senior Secured Credit Facility \| Level 1
Financial liabilities:
Long-term debt	$ 803,750		785,092
Senior Secured Credit Facility \| Level 2
Financial liabilities:
Long-term debt	131,000		191,000
Senior Unsecured Notes \| Level 1
Financial liabilities:
Long-term debt	394,000		312,000
Other long-term obligations \| Level 2
Financial liabilities:
Long-term debt	124,424		152,132
Carrying Amount
Financial assets:
Cash and cash equivalents	259,488		229,510
Advances to Jamul Tribe	92,334		92,100
Financial liabilities:
Other liabilities	50,783		48,244
Carrying Amount \| Senior Secured Credit Facility
Financial liabilities:
Long-term debt	896,539		962,703
Carrying Amount \| Senior Unsecured Notes
Financial liabilities:
Long-term debt	399,228		296,895
Carrying Amount \| Other long-term obligations
Financial liabilities:
Long-term debt	126,052		154,084
Fair Value
Financial assets:
Cash and cash equivalents	259,488		229,510
Advances to Jamul Tribe	98,198		98,000
Financial liabilities:
Other liabilities	50,783		48,244
Fair Value \| Senior Secured Credit Facility
Financial liabilities:
Long-term debt	934,750		976,092
Fair Value \| Senior Unsecured Notes
Financial liabilities:
Long-term debt	394,000		312,000
Fair Value \| Other long-term obligations
Financial liabilities:
Long-term debt	$ 124,424		$ 152,132

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Receivables, allowance for doubtful accounts (in dollars)	$ 3,148	$ 3,180
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	93,126,159	93,289,701
Common stock, shares outstanding	90,958,766	91,122,308
Treasury stock, shares held	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	0	0
Preferred stock, shares outstanding	0	0

Condensed Consolidated Statements of Changes in Shareholders' Deficit (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Condensed Consolidated Statements of Changes in Shareholders' Deficit
Share-based compensation arrangements, tax benefit	$ 689

Organization and Basis of Presentation	3 Months Ended
Organization and Basis of Presentation	Mar. 31, 2017
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. We have also recently expanded into social onling gaming offerings via our Penn Interative Ventures, LLC (“Penn Interactive Ventures”) division and our recent acquisition of Rocket Speed, Inc. (“Rocket Speed”) and into retail gaming with our Prairie State Gaming subsidiary. As of March 31, 2017, the Company owned, managed, or had ownership interests in twenty-seven facilities in the following seventeen jurisdictions: California, Florida, Illinois, Indiana, Kansas, Maine, 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 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, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The notes to the consolidated financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2016 should be read in conjunction with these condensed consolidated financial statements. The December 31, 2016 financial information has been derived from the Company’s audited consolidated financial statements.

New Accounting Pronouncements	3 Months Ended
New Accounting Pronouncements	Mar. 31, 2017
New Accounting Pronouncements
New Accounting Pronouncements	3. New Accounting Pronouncements Accounting Pronouncements Implemented in 2017 In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting.” 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. The Company adopted this change in accounting principle effective January 1, 2017. As a result of adopting the change to accounting for income taxes, for the three months ended March 31, 2017, the Company recognized an income tax benefit of $0.6 million related to excess tax deductions that would have previously been recognized as additional paid in capital within Shareholders Deficit. The Company did not record a cumulative effect adjustment to Retained Earnings due to having a full valuation allowance against all deferred tax assets. Deferred tax assets and the valuation allowance increased by $16.4 million at January 1, 2017 for the tax effect previously unrecognized for excess tax deductions. The Company has elected to present the change in classification of excess /(deficient) tax deductions from a financing activity to a operating activity within its consolidated statement of cash flows on a retrospective basis. The impact to the comparative period ended March 31, 2016 was an increase to net cash provided by operating activities and an increase in cash used in financing activities of $0.7 million, respectively. The Company has also made an accounting policy election to account for forfeitures when they occur which had no cumulative effect to retained earnings. Finally, effective January 1, 2017, the Company adopted the change related to diluted EPS on a prospective basis such that the net benefit/ (deficiency) attributable to taxes is no longer included in the computation of assumed proceeds. New Accounting Pronouncements to be Implemented In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which impacts virtually all aspects of an entity’s revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April and May 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. Management has not yet completed its assessment of the impact of the new standard on the Company’s consolidated financial statements. Although the Company is currently assessing the impact that the adoption of the new standard will have on its consolidated financial statements and related disclosures, we believe one area that will result in changes is our accounting for loyalty points which are earned by our customers. The Company’s Marquee Rewards program allows members to utilize their rewards membership card to earn promotional points that are redeemable for slot play and complimentaries. The accumulated points can be redeemed for food and beverages at our restaurants, and products offered at our retail stores across the vast majority of Penn’s casino properties. The estimated liability for unredeemed points is currently accrued based on expected redemption rates and the estimated costs of the services or merchandise to be provided. Under the new standard, we will need to defer the full retail value of the complimentaries until the future revenue transaction occurs. Although the exact amount of the increase to our point liabilities has not yet been determined, we do not anticipate it will have a significant impact on our earnings. The new standard will also require us to allocate the revenues associated with players’ activity between gaming revenue and the value of the points and to measure the liability based on the estimated standalone selling price of the points earned after factoring in the likelihood of redemption. As a result, we expect that gaming revenues will be reduced and that promotional allowance will no longer be netted on our statement of income. The revenue associated with the points earned will be recognized in the period in which they are redeemed. Additionally, at this time, we expect to adopt Topic 606 using the modified retrospective method on January 1, 2018. The Company is continuing to evaluate the new guidance both internally and through following the industry working group and plans to provide additional information at a future date.

Master Lease Financing Obligation	3 Months Ended
Master Lease Financing Obligation	Mar. 31, 2017
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 spin-off of GLPI 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 $112.4 million and $111.4 for the three months ended March 31, 2017 and 2016, respectively. The interest expense recognized for the three months ended March 31, 2017 was $97.7 million as compared to $98.7 million the three months ended March 31, 2016, respectively.

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2017
Subsequent Events
Subsequent Events	10. Subsequent Events On March 28, 2017, the Company announced that it entered into a definitive agreement to acquire RIH Acquisitions MS I, LLC and RIH Acquisitions MS II, LLC, the holding companies for the gaming operations of Bally’s Casino Tunica and Resorts Casino Tunica, in Tunica, Mississippi, for a total consideration of approximately $44.0 million in cash, subject to customary working capital adjustments. The transaction closed on May 1, 2017. The acquisition was funded by Penn with cash on hand and revolving commitments under the Company’s senior secured credit facility. The Company will operate both of these Tunica properties and lease the underlying real property associated with these two businesses from GLPI pursuant to the terms of the Company’s existing Master Lease with GLPI, with a total initial annual payment of $9.0 million subject to the provisions included in the terms of the Master Lease. The underlying real property leased from GLPI will be accounted for as a financing obligation, which is expected to increase the Company’s Master Lease financing obligation by approximately $82.6 million which represents the purchase price GLPI paid for the underlying real estate assets.

Organization and Basis of Presentation (Details)	Mar. 31, 2017 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 -Revenue Recognition, Player Loyalty Programs, and Gaming and Racing Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue Recognition and Promotional Allowances
Promotional allowances	$ 41,858	$ 40,571
Cost of complimentary services	13,753	13,465
Gaming and Racing Taxes
Gaming expense	244,400	243,200
Rooms
Revenue Recognition and Promotional Allowances
Promotional allowances	9,196	9,122
Cost of complimentary services	1,268	1,197
Food And Beverage
Revenue Recognition and Promotional Allowances
Promotional allowances	30,566	29,521
Cost of complimentary services	11,631	11,523
Other
Revenue Recognition and Promotional Allowances
Promotional allowances	2,096	1,928
Cost of complimentary services	$ 854	$ 745

Summary of Significant Accounting Policies - Long-term Asset Related to Jamul Tribe (Details) - Jamul Tribe - USD ($) $ in Millions	1 Months Ended
	Dec. 31, 2015	Oct. 20, 2016
Receivables - Loans and Debt Securities Acquired with Deteriorated Credit Quality
Loans receivable acquired, face amount	$ 60
Consideration for loans receivable acquired	$ 24
Loans receivable acquired, simple fixed interest per annum, percentage rate	4.25%
Loan repayment premium applied as new financing loan origination fee		$ 6

Summary of Significant Accounting Policies - Jamul Tribe Financing (Details) - Jamul Tribe $ in Millions	Oct. 20, 2016 USD ($)
Credit Facilities
Jamul Tribe long-term financing
Credit facilities borrowing capacity	$ 460
Credit Facilities \| Maximum
Jamul Tribe long-term financing
Senior secured net leverage ratio requirement	5.0
Revolving credit facility - Commercial banks
Jamul Tribe long-term financing
Credit facilities borrowing capacity	$ 5
Term Loan B Facility
Jamul Tribe long-term financing
Credit facilities borrowing capacity	340
Term Loan C Facility
Jamul Tribe long-term financing
Credit facilities borrowing capacity	98
Delayed Draw Term Loan C Facility Commitments
Jamul Tribe long-term financing
Credit facilities borrowing capacity	$ 15

New Accounting Pronouncements (Details) - USD ($) $ in Thousands		3 Months Ended		12 Months Ended
	Jan. 01, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
New Accounting Pronouncements
Income tax benefit		$ (2,198)	$ (7,734)
Net cash provided by (used in) operating activities		66,820	72,022
Net cash provided by (used in) financing activities		(13,531)	$ (23,586)
Accounting Standards Update 2016-09
New Accounting Pronouncements
Income tax benefit		$ 600
Accounting Standards Update 2016-09 \| Adjustment
New Accounting Pronouncements
Increase in deferred tax assets	$ 16,400
Increase of valuation allowance	$ 16,400
Net cash provided by (used in) operating activities				$ 700
Net cash provided by (used in) financing activities				$ (700)

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Plant and equipment
Property and equipment, net	$ 2,774,323		$ 2,820,383
Decrease in property and equipment	46,100
Depreciation expense	65,000	$ 65,600
Interest capitalized in connection with major construction projects	0	0
Master Lease Agreement
Plant and equipment
Depreciation expense	22,700	$ 22,900
Land and improvements - non-leased
Plant and equipment
Property and equipment	294,590		294,590
Land and improvements - master lease
Plant and equipment
Property and equipment	381,680		382,246
Building and improvements - non-leased
Plant and equipment
Property and equipment	404,875		404,158
Buildings and improvements - master lease
Plant and equipment
Property and equipment	2,219,017		2,219,018
Furniture, Fixtures and Equipment
Plant and equipment
Property and equipment	1,358,002		1,355,615
Leasehold Improvements
Plant and equipment
Property and equipment	119,404		118,940
Construction in progress - non-leased
Plant and equipment
Property and equipment	26,903		16,375
Non-leased assets
Plant and equipment
Property and equipment	2,203,774		2,189,678
Less Accumulated depreciation	(1,261,519)		(1,224,596)
Property and equipment, net	942,255		965,082
Master lease assets
Plant and equipment
Property and equipment	2,600,697		2,601,264
Less Accumulated depreciation	(768,629)		(745,963)
Property and equipment, net	$ 1,832,068		$ 1,855,301

Long-term Debt - Debt Summary (Details) - USD ($)	Mar. 31, 2017	Jan. 19, 2017	Dec. 31, 2016
Long-term Debt
Long-term debt	$ 1,458,373,000		$ 1,432,689,000
Less current maturities of long-term debt	(35,561,000)		(85,595,000)
Less net discounts	(2,937,000)		(620,000)
Less debt issuance costs	(32,333,000)		(16,535,000)
Long-term debt, net of current maturities and debt issuance costs	1,387,542,000		1,329,939,000
Senior Secured Credit Facility
Long-term Debt
Long-term debt	$ 931,000,000		976,845,000
Senior Subordinated Notes, 5.875 Percent, Due November 2021
Long-term Debt
Long-term debt			300,000,000
Principal amount			$ 300,000,000
Interest rate (as a percent)	5.875%		5.875%
Senior Unsecured Notes 5.625 Percent Due January 15, 2027
Long-term Debt
Long-term debt	$ 400,000,000
Principal amount	$ 400,000,000	$ 400,000,000
Interest rate (as a percent)	5.625%	5.625%
Other long-term obligations
Long-term Debt
Long-term debt	$ 126,052,000		$ 154,084,000
Capital leases
Long-term Debt
Long-term debt	$ 1,321,000		$ 1,760,000

Long-term Debt - Future Minimum Repayments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Future minimum repayments of long-term debt
Within one year	$ 35,497
1-3 years	78,612
3-5 years	422,517
Over 5 years	921,747
Long-term debt	$ 1,458,373	$ 1,432,689

Master Lease Financing Obligation (Details) - Master Lease Agreement - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Capital Leased Assets
Discount rate (as a percent)	9.70%
Total payments under Master Lease	$ 112.4	$ 111.4
Interest expense for the Master Lease	$ 97.7	$ 98.7

Investment In Unconsolidated Affiliates (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) ft² item	Mar. 31, 2016 USD ($)
Summary financial information
Net income attributable to Penn	$ 4,548	$ 4,609
Kansas Entertainment
Business ventures
Ownership interest in joint venture under agreement of sale (as a percent)	50.00%
Area of Casino (in square foot) \| ft²	244,791
Number of slot machines \| item	2,000
Number of table games \| item	41
Number of poker tables \| item	12
Number of space parking \| item	1,253
Summary financial information
Net revenues	$ 38,846	39,882
Operating expenses	28,838	30,446
Income from operations	10,008	9,436
Net income	10,008	9,436
Net income attributable to Penn	$ 5,004	$ 4,718

Subsequent Events (Details) - RIH Acquisitions MS I, LLC and RIH Acquisitions MS II, LLC - Subsequent Event $ in Millions	May 01, 2017 USD ($) item
Estimate
Subsequent events
Cash consideration	$ 44.0
Master Lease Agreement
Subsequent events
Number of businesses added to the Master Lease with GLPI \| item	2
Master Lease Agreement \| Estimate
Subsequent events
Increase in annual rental expense	$ 9.0
Expected increase in Master Lease financing obligation	$ 82.6