NEW YORK (

TheStreet

) -- Casino stocks are in the green on positive earnings results and reports of a potential makeover for Atlantic City.

Penn National Gaming

(PENN) - Get Report

reported better-than-expected second-quarter results, even as

earnings plunged 68%

.

The regional casino operator upped its full-year outlook, now expecting earnings of $1.18 a share, from prior guidance of $1.13. As a result, shares of Penn are surging 10.9% to $26.73 in afternoon trading.

On Wednesday, New Jersey Governor Chris Christie announced plans for the state government to take over Atlantic City's gaming district, with the goal of morphing it into the Las Vegas of the East.

The New Jersey gambling hub has been on a losing streak over the past several years. In June, gaming revenues plunged 11.1% to $286.8 million.

Shares of

Boyd Gaming

( BYG), which co-owns the Borgata (one of the most successful casinos on the New Jersey boardwalk) with

MGM Resorts International

(MGM) - Get Report

, are climbing 6.2% to $8.08.

Las Vegas Sands

(LVS) - Get Report

is also gaining 3.1% to $25.10,

Wynn Resorts

(WYNN) - Get Report

is growing 3.9% to $85.14, MGM is jumping 5% to $10.18 and

Ameristar Casinos

(ASCA)

is increasing 3.8% to $14.33.

--Reported by Jeanine Poggi in New York.

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