Nevada gaming regulators recommended a conditional two-year license Wednesday for sports betting technology provider GAN Ltd., because of recent changes in corporate management and a strategic financial restructuring effort the company is undertaking.

Approval by the Nevada Gaming Commission on Oct. 19 would give GAN the go-ahead to replace the troubled sports betting platform currently in place in Red Rock Resorts’ Southern Nevada sportsbooks.

There were already questions from the investment community about GAN, which has seen a 25 percent decline in its stock price in the past month, before Wednesday’s hearing in Las Vegas.

McGill was named CEO a week ago following the resignation of longtime CEO Dermot Smurfit, who spent a decade with the company. 

In a Sept. 26 statement, GAN said it was evaluating a consulting arrangement with Smurfit, “who remains a substantial stockholder” in the company. Several executives, including the chief financial officer, also resigned.

Board members Brittnie Watkins and George Assad expressed concerns about the company’s financial structure and the corporate departures, which led Chairman Kirk Hendrick to suggest a two-year limitation.

The board conditioned the license such that McGill, who is also GAN’s chairman, couldn’t hold both positions. It’s also unclear whether GAN’s interim chief financial officer wants to remain in the role permanently.

“I think an ongoing agreement [would require] the company to stay in contact with the investigative division and provide all updates,” Hendrick said. “I'm personally OK with the idea that a CEO has an application file with the Gaming Control Board within a year.”

The company provides sports betting technology to the Island View Casino in Gulfport, Mississippi, and Wynn Resort’s Encore Boston Harbor in Massachusetts. GAN CEO Seamus McGill suggested the company might expand its presence at Wynn’s Strip operations following approval by Nevada.

GAN is waiting for approvals by Gaming Laboratories International (GLI) as well as the control board’s technology division of the sports betting and horse racing wagering platforms.

“We've had a very successful first installation in Mississippi and we had a second very successful installation at Wynn in Massachusetts, and we're confident [it] will be very successful here in Nevada,” McGill said.

The departure of Smurfit last week led Macquarie Securities gaming analyst Chad Beynon to suggest that investor uncertainty around GAN remained high.

“The company has still not launched its sports betting products with [Red Rock Resorts] in Nevada almost two years post-deal announcement, which raises more questions,” Beynon wrote in a research note following the CEO change.

Gaming attorney Scott Scherer, representing GAN, told the control board on Wednesday that the company had announced its strategic restructuring effort and is working through that process.

Expanding to Nevada

GAN, which launched in Europe, has a U.S. headquarters in Irvine, California, and an office in Las Vegas. GAN is licensed globally across 25 countries, states and Tribal governments. The company employs 700 people worldwide.

McGill told the control board the company hoped to have all licensing approvals for the sports betting and horse racing technology in place by early November.

“The plan is to expand into other jurisdictions, including Nevada, and not only with Wynn, but other major customers in the Nevada market, and then to take it throughout the rest of the United States,” McGill said.

Red Rock, through its Station Casinos subsidiary, agreed to pay an $80,000 fine to state gaming regulators in June 2022 to settle a two-count complaint concerning serious glitches in the company’s sports wagering system at Red Rock Resort that caused the company to accept approximately 348 wagers on events with already known outcomes, often referred to as “past-posting.” The company said at the time that customers and the state weren’t financially affected by the issues.

GAN announced an agreement in October 2021 to build out the sports betting infrastructure for Station Casinos’ retail sportsbooks, betting kiosks and the STN mobile app.

Beynon wrote in his research note that McGill's background and experiences in gaming “give us confidence that the company is in good hands while it continues its strategic review.”

McGill brings 25 years of experience in the gaming and technology industries to the CEO role. He joined the company’s board in 2014. He previously was CEO of a mobile software company that was sold to Sightline Payments in 2021 and he spent five years at Aristocrat Technologies as its chief operating officer, helping establish the Australian gaming equipment company in North America.