<SUBMISSION>
<ACCESSION-NUMBER>0001179110-07-004291
<TYPE>4
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20070216
<FILING-DATE>20070221
<DATE-OF-FILING-DATE-CHANGE>20070221
<ISSUER>
<COMPANY-DATA>
<CONFORMED-NAME>PENN NATIONAL GAMING INC
<CIK>0000921738
<ASSIGNED-SIC>7990
<IRS-NUMBER>232234473
<STATE-OF-INCORPORATION>PA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<BUSINESS-ADDRESS>
<STREET1>825 BERKSHIRE BLVD STE 200
<STREET2>WYOMISSING PROFESSIONAL CENTER
<CITY>WYOMISSING
<STATE>PA
<ZIP>19610
<PHONE>6103732400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>825 BERSHIRE BLVD
<STREET2>SUITE 200
<CITY>WYOMISSING
<STATE>PA
<ZIP>19610
</MAIL-ADDRESS>
</ISSUER>
<REPORTING-OWNER>
<OWNER-DATA>
<CONFORMED-NAME>CARLINO PETER M
<CIK>0001211342
</OWNER-DATA>
<FILING-VALUES>
<FORM-TYPE>4
<ACT>34
<FILE-NUMBER>000-24206
<FILM-NUMBER>07639411
</FILING-VALUES>
<BUSINESS-ADDRESS>
<PHONE>6103732400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>825 BERKSHIRE BLVD
<STREET2>SUITE 200
<CITY>WYOMISSING
<STATE>PA
<ZIP>19610
</MAIL-ADDRESS>
</REPORTING-OWNER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2007-02-16</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000921738</issuerCik>
        <issuerName>PENN NATIONAL GAMING INC</issuerName>
        <issuerTradingSymbol>PENN</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001211342</rptOwnerCik>
            <rptOwnerName>CARLINO PETER M</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>825 BERKSHIRE BLVD SUITE 200</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>WYOMISSING</rptOwnerCity>
            <rptOwnerState>PA</rptOwnerState>
            <rptOwnerZipCode>19610</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chairman &amp; CEO</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2007-02-16</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>J</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>29071</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>9607604</value>
                    <footnoteId id="F1"/>
                    <footnoteId id="F2"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>Held by Trust</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes>
        <footnote id="F1">Shares are owned by the Carlino Family Trust, a greater than ten percent owner of the issuer and indirectly owned by Peter M. Carlino, Harold Cramer, Peter D. Carlino, Richard J. Carlino and David E. Carlino, the trustees of the Carlino Family Trust.  The Carlino Family Trust distributed 29,071 shares to certain beneficiaries of the trust.  Peter M. Carlino is a trustee of the Carlino Family Trust and an officer and director of the issuer and is reporting this transaction on behalf of the Carlino Family Trust</footnote>
        <footnote id="F2">The reporting person is also the indirect beneficial owner of (a) 212,660 shares owned by the Grantor Retained Annuity Trust(GRAT)of Marshia W. Carlino dated 01/19/2005 of which Peter M. Carlino is the Trustee and (b)452,997 shares owned by a GRAT of Peter M. Carlino dated 09/23/2005 and (c) 473,755 shares owned by a GRAT of Peter M. Carlino dated 05/19/2006 all of such shares were previosuly reported as beneficially owned prior to being contributed to the respective GRATs.  Peter M. Carlino disclaims beneficial ownership of the shares owned by the Carlino Family Trust and the three GRATs, and this report should not be deemed an admission that Peter M. Carlino is the beneficial owner of such securities for the purpose of section 16 or any other purpose. Mr. Carlino is also the indirect beneficial owner of 53,793 shares owned by his wife. In addition, Peter M. Carlino directly owns 609,494 shares.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/Robert S Ippolito as attorney-in-fact for Peter M. Carlino</signatureName>
        <signatureDate>2007-02-21</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
