When we checked in on Pinnacle Entertainment (NYSE:PNK) two years ago, the riverboat casino operator was just starting to gain some momentum. Revenues were consistently higher, and following a string of upside earnings surprises, the company was poised to post an annual profit for the first time in several years.

Despite the company having several high-profile projects in development, there weren't any tangible benefits from them yet, and there didn't appear to be any imminent rush to join the party.

Big mistake, that. Since that write-up, the shares have more than doubled, climbing from $15.44 to Wednesday's close of $34.19. With most of those gains coming in the past year, let's see what was behind the sharp run-up.

Hello and goodbye to Aztar
Early in the year there was some pretty exciting news. In March, Pinnacle announced the $2.1 billion acquisition of Aztar, the owner of Tropicana-branded resorts in Las Vegas and Atlantic City. Though Aztar's recent operating performance had been lackluster, the company was sitting on some valuable real estate, including a prized 34-acre parcel of land at one of the busiest intersections on the Las Vegas Strip.

After heated bidding involving four potential suitors, Pinnacle came up a little short, but it didn't leave empty-handed -- pocketing $45 million in breakup fees as a consolation prize. More importantly, the extravagant purchase would have soaked up a few billion in capital, at the least. By walking away, management left the firm in a much more flexible position to fund ambitious development plans elsewhere.

Shareholders applauded the fiscal restraint, sending the shares more than 8% higher on the news. There was also a growing sense of optimism surrounding Pinnacle's commitment to gaining a foothold in Las Vegas and Atlantic City, a move that would give the regional company a national presence and significantly bolster its cross-marketing capabilities. More on this later.

Doubling down in Lake Charles
Meanwhile, Pinnacle had already started fiscal 2006 on the right foot. In May, the company announced that first-quarter revenues jumped 70% to $234.1 million, while EBITDA rose 135% to $59.6 million. Much of the credit went to the newly opened L'Auberge Du Lac Resort in Lake Charles, Louisiana, which raked in more than one-fourth of the firm's adjusted EBITDA on revenues approaching $80 million.

Around that time, the company announced even bigger plans for the Lake Charles market. Through an asset swap with rival Harrah's Entertainment (NYSE:HET), Pinnacle assumed control of two gaming licenses and other assets there in exchange for the battered Casino Magic complex in Biloxi, Mississippi.

Soon after, plans for an upscale Caribbean-themed property called Sugarcane Bay were unveiled. The new $350 million resort will sit adjacent to the L'Auberge Du Lac -- Louisiana's highest-grossing riverboat casino -- creating a true entertainment destination for high-end players from nearby Houston.

A strong second half
With summer winding down, Pinnacle posted another round of solid quarterly results in August. Revenues climbed 51% to $228.8 million, which helped EBITDA rise 80% to $54.5 million.

Once again, the L'Auberge Du Lac turned out healthy numbers, as did the Boomtown New Orleans. Even with the reopening of Harrah's land-based casino in downtown New Orleans, revenues at Boomtown still rose 80% because the lack of competition in Mississippi left more than enough business to go around.

While Pinnacle was doing a commendable job of squeezing higher revenues and profits from its existing portfolio, management still had expansion on its mind. Soon after the release of its second-quarter results, plans were revealed to finally crack the Atlantic City market with the purchase of the Sands Casino and 18 acres of prime boardwalk property for $270 million.

Playing off the success of MGM Mirage's (NYSE:MGM) and Boyd Gaming's (NYSE:BYD) popular Borgata, expect Pinnacle to devote substantial resources to developing a premier, amenity-laden resort on the site that will anchor the firm's network.

For now, third-quarter results released last month show that Pinnacle remains on track to put together its most successful fiscal year ever. Revenues were higher across the board, which helped drive property-level EBITDA up 160% to $54 million. As a result, earnings from continuing operations swung from a loss of $0.09 loss to a profit of $0.25.

What the crowd thinks
To be sure, Pinnacle has come a long way in a relatively short time. However, the shares have already responded to that success. So, will this winning streak continue, or should shareholders cash out their chips and take gains off the table?

According to our Motley Fool CAPS community, the future remains bright for Pinnacle, considering most players polled are expecting the stock to outperform the S&P 500.

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Here's what one, novaseast05, has to say about the company, which has a five-star rating.

"Solid balance sheet, expanding into AC market. Shareholder friendly management not willing to sacrifice value to 'grow at any cost.' "

Closing remarks
This has been a phenomenal year for the gaming group, which has racked up an average market-cap weighted gain of 56% over the past 12 months. Pinnacle is no exception, what with the shares having been on a tear since late August.

As was the case two years ago, the company has a number of exciting projects on the horizon, including two promising gaming/entertainment complexes in St. Louis. However, given private equity's sudden interest in the casino industry, it wouldn't completely surprise me if Pinnacle found itself in the cross-hairs of a larger organization before those projects even get off the ground.

Catch up with these Foolish Takes on gaming:

Check out the other companies featured in "The Motley Fool's 2006 in Review and 2007 Preview" special.

Don't take any chances with your portfolio in the new year. Take a risk-free look at Stocks 2007 , filled with our analysts' recommendations.

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Fool contributor Nathan Slaughter owns shares of Boyd, but none of the other companies mentioned. Nobody gambles with the Fool's disclosure policy.