But both companies warned the talks may not produce results.
“These discussions may or may not lead to any transaction, and the company does not intend to comment further on market speculation or disclose any developments unless and until it otherwise deems further disclosure is appropriate or required,” Wyoming, Pennsylvania-based Penn said in a statement.
Pinnacle likewise said there was no guarantee that the talks could lead to a deal.
Pinnacle Entertainment operates a rural casino on the Nevada-Idaho border and a portfolio of Southern and Midwestern resorts and racetracks.
The Wall Street Journal recently reported that the two companies were in talks for a potential merger. A merger would result in a combined company with more than $5 billion in revenue.
Shares of Penn National gained 32 cents, or 1.13 percent to close at $28.76. Pinnacle shares gained $1.08, or 3.65 percent, to $30.68.