Shares of casino operator Bally’s Corp. jumped more than 20% in morning trading after the company’s largest shareholder, hedge fund Standard General LP, submitted an offer to buy the remaining stock it doesn’t already own for $38 a share.

Standard General, which already owns a 21% stake in Bally’s, on Tuesday submitted a letter to the Bally’s board detailing the offer, which Bally disclosed in a filing with the Securities and Exchange Commission.

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Shares of casino operator Bally’s Corp. jumped more than 20% in morning trading after the company’s largest shareholder, hedge fund Standard General LP, submitted an offer to buy the remaining stock it doesn’t already own for $38 a share.

Standard General, which already owns a 21% stake in Bally’s, on Tuesday submitted a letter to the Bally’s board detailing the offer, which Bally disclosed in a filing with the Securities and Exchange Commission.

The deal values Bally’s at nearly $2.07 billion.

The hedge fund, whose founding partner and Chief Investment Officer Soo Kim currently serves as Bally’s chairman, said it expects the board to appoint a special committee of independent directors to consider its proposal and make a recommendation, according to the company’s SEC filing.

Standard General won’t move forward with the deal unless it is approved by the special committee, Bally’s said in the filing.

The deal is also contingent on approval by the holders of a majority of Bally’s shares that aren’t owned by Standard General, the company added.

Representatives for Bally’s declined to comment. Standard General didn’t respond to a request for comment.

Bally’s stock jumped more than 20% from Monday’s closing price of $29.23 a share to open Tuesday morning at $36 a share after the buyout offer was disclosed.

Bally’s rose to prominence through the 20th Century under the name Bally Entertainment Corp. , under which it ran a sprawling entertainment empire that included the Six Flags amusement-park chain and the videogame company behind some of the biggest arcade hits of the 1970s and 1980s, including “Space Invaders” and “Pac-Man.”

In 1996, Hilton Hotels Corp., now Hilton Worldwide Holdings Inc. , bought Bally Entertainment in a deal valued at more than $2 billion. Hilton later spun off its casino business, which was acquired in 2005 by Harrah’s Entertainment, later becoming Caesars Entertainment Inc.

During 2020, in the throes of the Covid-19 pandemic, Twin River Worldwide Holdings, a casino operator owned by Standard General, bought the rights to the Bally’s brand from Caesars Entertainment and renamed the company Bally’s Corp.

The pandemic, which hammered casino operators particularly hard, allowed Twin River to go on a buying spree, scooping up a number of casinos in Missouri, Mississippi, Louisiana, Nevada and elsewhere over the past two years.

The latest incarnation of the company manages 14 casinos across 10 states, a horse racetrack in Colorado and has access to online sports betting licenses in 16 states, according to the company.

Write to Will Feuer at will.feuer@wsj.com