The regional gambling market continues its slow and steady growth, pushing results for Penn National Gaming, Inc. (NASDAQ: PENN) higher along the way. Each of the company's regional operating segments saw a revenue increase, and a focus on maintaining strong margin has helped the bottom line improve as well. After spinning off most of its real estate into Gaming and Leisure Properties (NASDAQ: GLPI), Penn is now highly leveraged to the gambling business. As long as revenue keeps going up, the stock will do well, but there could be signs of some headwinds coming as early as next quarter. Here's what to keep an eye on. Image source: Getty Images. The numbers Third-quarter revenue rose 5.3% to $806.2 million, and adjusted EBITDA after master lease payments to Gaming and Leisure Properties was up 6% to $107.3 million. Net income was $789.3 million, which includes a $766.2 million non-cash tax gain. Without that one-time gain, earnings per share were $0.27. Results easily topped the guidance for $790.9 million in revenue, adjusted EBITDA of $220.4 million, and earnings of $0.20 per share. Where the odds are in Penn's favor In the gambling industry, there are often highs and lows in different segments of the market. But Penn National's regional segments all displayed some growth in the quarter. Northeast revenue was up 1.5% to $401.8 million, South and West revenue rose 18.5% to $160.2 million, and Midwest revenue rose 4.9% to $232.1 million. Headwinds are coming As strong as conditions were in the third quarter, management didn't set a very high bar for itself in the fourth quarter. Guidance was for net revenue of $756.6 million, adjusted EBITDA of $91.7 million, and earnings of $0.17 per share, all down from the third quarter. There may be some seasonal slowdown in the fourth quarter, but guidance indicates less than 2% top-line growth over a year ago. Management may be choosing to be conservative, but investors should watch whether the guidance is setting a low bar or an indication that competition from new resorts like MGM National Harbor on the East Coast is taking away revenue. Slow and steady wins the race The slow improvement in revenue and earnings allowed Penn National to reduce debt by $60.5 million in the third quarter to $1.05 billion of net debt. Net debt to adjusted EBITDA after master lease payments was just 2.59, a very manageable ratio for the company. Penn National may soon get to the point where its debt is low enough and cash flow is high enough that it can join competitors such as Las Vegas Sands and Wynn Resorts in paying a regular dividend. Traditionally, Penn National would use any excess cash to fund growth, but there aren't a lot of expansion opportunities, and if cash keeps coming, in a dividend may be the best use for cash in the long term. 10 stocks we like better than Penn National GamingWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Penn National Gaming wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of October 9, 2017Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.