What happened

Shares of casino operator Penn National Gaming (PENN -0.06%) are higher by 8.9% late Thursday following the company's second-quarter earnings beat and an announcement that the company intends to acquire Score Media and Gaming (SCR). The deal will deepen Penn's reach into the sports and sports-betting markets.

So what

For the three-month stretch ending in June, Penn National Gaming earned $1.17 per share on revenue of $1.55 billion. Both figures were up compared to pandemic-crimped results produced in the second quarter of last year, but more important, those results topped analyst expectations of $1.45 billion worth of sales and profits of $0.90 per share. It also appears the company will be able to continue its recovery from the pandemic-prompted lull.

A hand drawing a rising red arrow.

Image source: Getty Images.

At least some of that growth will be spurred by the $2 billion acquisition of Score Media and Gaming, which is the name behind sports app theScore. The app offers users access to sports-related media and information as well sports-based betting where it's legal to do so.

Now what

The potential of the acquisition is significant. Penn National Gaming is already a stakeholder in Barstool Sports, and has leveraged the brand name within (and outside of) its resorts to appeal to consumers who may not be interested in a traditional casino experience. At the same time, with technology market research outfit Technavio estimating that the sports betting market itself will grow at an annual clip of 10% through 2024 -- and be $134 billion bigger than it was in 2020 as a result -- Penn's positioning is a smart move.

Sure, Thursday's 9% pop makes stepping in now a daunting proposition. Given the stock's subpar performance since peaking in March, though, there's still lots of room to recover a big piece of that 50% pullback. Today's jolt may well be a sign that the pivot out of this multi-month sell-off is finally taking shape.