‘Regular fishing trips’: WA chief casino officer stood aside over close contacts to Crown bosses
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Mr Connolly stood aside on Friday after 6PR and WAtoday asked questions about the nature of those relationships on Thursday.
The stand-down comes as WA’s system of casino regulation is under scrutiny because of revelations of years of money laundering through Crown Perth, detailed in the NSW licence inquiry report handed down last week by retired Supreme Court justice Patrician Bergin.
WAtoday it was well known inside the Racing and Gaming section of the department that Mr Connolly maintained social contact over many years with Paul Hulme, Crown’s manager of gaming and regulatory compliance, and Claude Marais, Crown’s general manager of legal and compliance.
There is no suggestion whatsoever of any wrongdoing by Mr Hulme or Mr Marais.
A Crown spokeswoman said while the company believed the employees had made all necessary disclosures, it had still requested an independent external review, with the findings to be reported to the Department of Local Government, Sport and Cultural Industries.
“In managing potential conflicts of interest, Crown recognises how issues are perceived is of critical importance,” she said.
In a formal response to 6PR and WAtoday, Mr Ord acknowledged the social contact but denied the staff involved were part of Crown’s executive or senior level of management or “occupied a decision making position”.
“Mr Connolly does not refute socialising with employees of Crown Perth, including taking them fishing on his trailer boat,” Mr Ord said.
“The nature of the relationship is one of being friends for an extended period. This friendship, and any potential or perceived conflict has been declared formally and has been discussed and declared to myself and the former director general Barry Sargeant, as well as the Gaming and Wagering Commission, who have noted the declaration of interest in the minutes of meetings.
“In consideration that there should be no perception of a conflict of interest, Mr Connolly is stepping aside from his role as chief casino officer effective immediately.
“Mark Beecroft has now assumed the role to assist the Commission with its response to the inquiry report.”
Leading gambling researcher Dr Charles Livingstone from Monash’s school of public health said it was noteworthy that Mr Connolly was stood aside only after the nature of his relationship to Crown staff became known to 6PR and WAtoday.
“The advice that this was not previously perceived as a conflict of interest is staggering,” he said.
“Casinos are magnets for criminal infiltration and money laundering. They require careful and professional regulation, with a significant level of detachment and distance between the casino and those who regulate it.
“In my opinion, Mr Connolly has demonstrated little understanding of that principle.
“The idea that a senior regulator would see nothing wrong with a) hanging out with the casino’s staff, and b) take them fishing in his boat is quite remarkable, regardless of whether they are senior management, or the people with whom he liaises when undertaking audits and compliance checks.
“Either way, the possibility that his judgment and insight would be compromised by such friendly relationships is clear. The perception, and perhaps the reality of serious conflict of interest is obvious, yet apparently that has only now been realised.”
It is not the first time the spotlight has turned on the closeness between the monopoly casino and its regulator.
In 2014, Mr Sargeant, the former director general and chairman of the Gaming and Wagering Commission, accepted a $6475, three-day trip to Macau, paid for by Crown, which was criticised by the then-Labor opposition.
Barnett Government Gaming Minister Terry Waldron said the trip was appropriate so Mr Sargeant could learn about Crown’s VIP business.
In 2015, the Commission removed full-time casino inspectors from the Crown Perth gaming floor.
Mr Ord said that decision was made by Mr Sargeant and endorsed by the Commission, but was not made by Mr Connolly, who did not have that power.
WA Racing and Gaming Minister Paul Papalia said he was meeting with Mr Ord on Monday and would be discussing the stepping aside of Mr Connolly.
He said stepping aside was the right thing to do, “to avoid any perception, real or implied, of a conflict of interest”.
The Gaming and Wagering Commission would meet on Tuesday after receiving advice from the State Solicitor’s Office regarding the Bergin inquiry report.
The Bergin inquiry report lifted the lid on Crown’s so-called junket operations for Asian “whale” gamblers and also detailed how there were red flags money was being laundered through Crown’s Perth and Melbourne casinos as far back as 2014.
Melbourne’s gaming regulator announced it would write to Crown to ask why CEO Ken Barton and director Andrew Demetriou could be considered fit and proper associates of the casino. Both men stood down under pressure late last week.
Mr Ord hinted that the Gaming and Wagering Commission and the Department did not have the powers or responsibility for preventing money laundering through Crown Perth.
“The casino presents a complex regulatory environment with oversight by a range of state and federal regulators,” Mr Ord said.
“The casino is subject to a range of requirements under Commonwealth legislation including the Anti-Money Laundering and Counter-Terrorism Financing Act and are required to report certain financial transactions to AUSTRAC. AUSTRAC then shares intelligence information it compiles with relevant law enforcement agencies such as state and federal police.
“Neither the Commission or the Department are law enforcement agencies for these purposes and there are restrictions on what we can ask for and be provided with from Crown.”
It is the first substantive comment a WA regulator has made on the NSW inquiry report, other than to note it had been awaiting advice from the State Solicitors Office.
