UPDATE 3-Penn National profit beats estimates, shares rise

* Penn National net income 38 cents per share

* Revenue fell 1.26 percent to $612.23

* Forecasts Q2 profit of 35 cents a share

* Confirms shopping for Vegas casino

* Shares rise 7 percent (Adds company, analyst comments; byline; updates stock price)

By Deena Beasley

LOS ANGELES, April 23 (Reuters) - Penn National Gaming Inc's (PENN.O) profit beat Wall Street forecasts, helped by stronger-than-expected revenue at its regional casinos and racetracks and a tighter rein on costs, sending shares up 7 percent.

Penn, which operates throughout the United States, but not in the gambling centers of Atlantic City and Las Vegas, is shopping for a casino on the Las Vegas Strip, but there is no guarantee that a deal will be reached, Chief Executive Peter Carlino said on a conference call with investors and analysts.

"We are not trying to make Las Vegas the power center of the company. We just want a spot there," he said.

Penn National is commonly named to the list of potential buyers looking at casinos up for sale by MGM Mirage (MGM.N), which has been struggling to raise cash in order to fend off a debt default.

Carlino said the gap between bid and ask prices has not moved much since that time, "but that doesn't mean something isn't going to happen."

Penn, which last year terminated a buyout deal with two private equity firms, posted quarterly net income of $40.66 million, or 38 cents per share, compared with $40.74 million, or 46 cents a share, a year earlier.

"This reflects the health of Penn's markets, its strong competitive positioning in these regional, drive-to markets, and the ability to extract margin improvement even on flat year-over-year revenue performance," JP Morgan analyst Joe Greff said in a research note.

He calculated Penn's adjusted earnings per share at 40 cents, which was above the 33 cents per share average forecast from analysts polled by Reuters Estimates.

Net revenue fell 1.26 percent to $612.23 million, but still exceeded the average analyst estimate of $603.8 million.

For the second quarter, the company forecast a profit of 35 cents per share on revenue of $595.6 million. The average Reuters forecast was 33 cents a share on revenue of $602.7 million.

The outlook, after adjusting for a recent fire that has sidelined Penn's Joliet, Illinois, property, is "up a little bit," said Susquehanna Financial analyst Robert LaFleur.

Shares were up $1.86 at $29.57 in Nasdaq trading. (Reporting by Deena Beasley and Kyle Peterson, editing by Maureen Bavdek and Derek Caney)