Nektan was an international gaming technology and services provider. They offered both business-to-business and business-to-customer services, including a gaming content aggregator, as well as a bouncing platform that promised premium content from some of the world’s leading game-makers. Things started going wrong for the company in 2019, with Nektan failing to publish its accounts by the end of the year and therefore ending up suspended from trading.
Soon, Nektan had sold its Business-to-Customer arm to Grace Media in a deal that was worth about £200,000. This was part of a wider restructuring of the company, which helped it to stave off the threat of administration. It wasn’t long before the company was back in trouble, however, and it entered administration for a second time during 2020. In spite of it basically being shutdown, it then had its licence suspended by the Gambling Commission in April of 2021, putting the final nail in the coffin.
Who Were Nektan?
Nektan Limited began operating as an online casino service provider in May of 2011. It was the brainchild of Gary Shaw, who had previously worked with St. Minver before that company was sold to GTECH. He began bringing on board industry veterans to help him set up the new company, which made headway in a competitive market in a short space of time. It became a PLC in 2014, raising £4.1 million on the first day that it traded on the stock market.
At the time, Nektan was valued at in excess of £50 million, which was hugely impressive for a business that had only been open for three years or so. The creation of its ‘Evolve’ platform led to predictions that it would be worth £19 billion in gross gaming revenue by the end of 2018. This was linked to the company’s work with big online casinos such as LeoVegas, as well as it producing an online freemium bingo game for Channel 4’s Come Dine With Me TV show.
Trouble Began to Brew
For many, the first sign that Nektan was in some sport of trouble came about at the start of 2020. Nektan Plc had failed to file any accounts for the period up to the 31st of December 2019, which raised some red flags for the likes of the United Kingdom Gambling Commission. Initially, it was feared that the company was going to have to go into administration, but the administrators brokered a deal in which the Business-to-Customer arm of Nektan could be sold to Grace Media for £200,000.
Coming off the back of an admission by the company that it had suffered £9 million in losses during the one-year period to the 30th of June 2019, it was felt by most within the gambling world that its new-found sense of safety was built on quicksand. When the deal was finalised on the seventh of January 2020, it came on the back of Grace Media making an initial payment of £50,000 in cash. It was planned to be the start of a restructuring process that would add stability to the company’s remaining assets.
At the time, Nektan said that the sale of its B-2-C business would not affect the operation of the rest of the company, thanks in no small part to an agreement made with Grace Media to have a Business-to-Business partnership. Nektan would receive monthly royalties from Grace Media, thereby ensuring that it was solvent and could keep operating. The company’s Interim Chief Executive, Gary Shaw, described the deal as being ‘reassuring to all stakeholders involved’.
No Longer Listed for Trade
Soon, Nektan was removed from the Alternative Investment Market. This was because it is a requirement of the AIM that all companies publish their accounting details at the end of the year, which Nektan had failed to do. It was not a shock to shareholders, who had been warned that it might happen on the 23rd of December 2019. Even so, it was not a promising start to 2020 for the gaming provider, which was delisted thanks to breaking Rule 40 of the AIM constitution.
With the Chief Executive Officer, Lucy Buckley, having resigned in August of 2019, the company was not in a good way as 2019 turned into 2020. Buckley had only been in the post since the previous December, but when she failed to turn the company around from its failing state of affairs it became clear that her position was untenable. It was hardly Buckley’s fault, with the British white label market suffering on account of the increase to the Remote Gaming Duty, as well as the introduction of stricter Know Your Customer rules.
When Nektan failed to secure the funding needed to allow it to continue trading, it was clear that the vultures would begin circling. Despite the fact that it was operating in markets across Africa, Asia and Europe, plus the launch of six more sites in January of 2020, the failure to secure any funding meant that Nektan’s business as a whole ground to a halt. The company was as good as finished before the health crisis changed the shape of the online casino business for good.
The UKGC Suspends Their Licence
Perhaps the most bizarre part of the Nektan story came about in April of 2021. Having been effectively out of business for around a year, the United Kingdom Gambling Commission chose to suspend Nektan’s remote operating licence whilst its conducted a review into the company’s behaviour. It’s unlikely that anyone working for or associated with Nektan will have been all that bothered, given that they were no longer operating any casinos at the time that the licence suspension was issued.
The UKGC informed Nektan Plc that it had suspended the remote Business-to-Customer gambling licence of its mobile gaming offering, having placed it under a Section 116 investigation. The Gambling Commission planned to investigate whether or not Nektan had breached the conditions of its licence with regards to its compliance duties, as well as the ‘manner in which the operator carried its licensee practices’. The suspension took effect on the 27th of April, 2021.
Having had its licence suspended, Nektan would be breaking the law if it offered its gambling services via any of its websites that were listed on the Gambling Commission’s public register. It was a curious suspension, given that the company’s Business-to-Business operation was bought by Real-Time Strategic Marketing Limited and became Markor Technology instead. Markor Technology is still operating at the time of writing, so in some ways, Nektan lives on through it.