There is the possibility that what they said was with racist intentions. However, given that this is the only thing in their chatlogs that could come close to being racist, I'm going to hold off on taking any action at this time.
Besides, there's plenty of 6 letter words that starts with the letter N. You've got nachos, narwal, native, nephew, nipple, etc...
Jokes aside, we'll keep an eye on him and take note of this incident.