The Washington government's chief casino officer has stepped aside after questions were raised about his social relationship with members of the Crown Perth legal and compliance team.
- Mr Connolly is said to have resigned on Friday
- What follows is a damn report that claims Crown was used to launder money
- Several Crown executives have resigned over the allegations in the report
Michael Connolly is the Deputy Director General for the Department of Local Government, Sports and Culture Industries (DLGSC) and the Chief Casino Officer under WA Casino Control Legislation.
He is believed to have resigned on Friday following questions from radio station 6PR last week.
It comes when Ken Barton resigned as Crown Resorts CEO and general manager after last week's scathing report on the gambling giant that exposed years of money laundering by Crown Perth.
In a statement, DLGSC Director General Duncan Ord said Mr Connolly had not refuted any contact with Crown Perth employees, "including fishing on his trailer boat."
"The people Mr. Connolly fished did not fit into the management category, they were not and are not part of the executive branch," said Mr. Ord.
"The nature of the relationship is to be friends over a long period of time."
Do you know more about this story? Contact Rhiannon Shine
Mr Ord said the friendship and any potential or perceived conflict had been officially declared to him and former General Manager Barry Sargeant and the Gaming and Betting Committee, who had noted the declaration of interest in the minutes of the meeting.
"Having regard to the fact that no conflict of interest should be perceived, Mr. Connolly is stepping down from his role as Chief Casino Officer with immediate effect," said Ord.
"Mark Beecroft has now taken on the role of assisting the Commission in responding to the investigation report."
WA's Gaming and Wagering Commission will meet Tuesday to discuss a damned report that found Crown unsuitable for running a new Sydney casino. (ABC News: Hugh Sando)
The friendship was declared to the department
A state government spokesman said the DLGSC had told Mr Connelly that he had formed a long-standing friendship with the Crown employee in 2015 and 2020.
"This process is managed by the department," the spokesman said in a statement.
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"The state government takes these matters very seriously.
"Since taking office in 2017, the Board of Directors of the Gaming and Wagering Commission has been completely renewed."
The spokesman said the State Solicitor's Office (SSO) had advised the chairman of the Gaming and Wagering Commission on the explosive report by the NSW Independent Liquor and Gaming Authority (ILGA) that Crown was unable to operate a casino Own license in Sydney.
According to the report, hundreds of millions of dollars were raised through the Crown Casino in Perth from a $ 2 shell firm called Riverbank Investments Pty Ltd. washed.
Racing and Games Minister Paul Papalia said it was right for Mr Connolly to step aside.
"I'm meeting with the director general of the Department of Local Government, Sports and Culture this morning ahead of tomorrow's gaming and betting committee meeting to evaluate the ILGA review," he said.
"I will also discuss Mr. Connolly's departure, which was the right thing to do to avoid real or implied perception of a conflict of interest.
"A jurisdictional working group has also been established with the New South Wales and Victoria regulators to enable a harmonious response to future regulatory and legislative reforms."
WA Prime Minister Mark McGowan said he was disappointed to learn of Mr. Connolly's friendship with Crown employees and stepping aside was the right course of action.
"I would expect higher standards," said McGowan.
"I am disappointed and expect appropriate measures to be taken."
Mr McGowan said the government was working on the results of the NSW investigation.
He said WA would conduct its own judicial investigation if needed.
"If I get evidence to require it, we certainly will," he said.
"Worrying and Confusing": Greens
WA Greens MP and gambling spokeswoman Alison Xamon said she was alarmed about Mr. Connolly's relationships with Crown executives.
"I am very concerned that the state government does not seem to have shown the diligence that we expect the regulator to do," she said.
"The fact that conflicts of interest have been declared but no action has been taken to address what is very worrying and confusing."
According to Alison Xamon, the government's due diligence has been disappointing. (ABC News: Eliza Laschon)
Linda Hancock, a professor at Deakin University who has worked on kroner and gambling regulation for more than two decades, said there appears to be a clear conflict of interest.
"It really points to the need for a federal regulator," she said.
"You can't trust the state regulators, they have proven over the years that they are into tick and flick, they are not proactive regulators," she said.
Professor Hancock said it was not good enough that the friendship was declared.
"A declaration of a conflict of interest in the minutes of a meeting means nothing," she said.
"If you have social contact with someone or a company where you are supposed to regulate them independently, you should stay away from such decisions and not just write them down in the log."