Fevola was spotted by casino staff playing poker and was approached by a responsible gaming liaison officer, who recommended the 30-year-old to leave Crown.
The troubled footballer has only just recently returned to Melbourne on Monday after a two-month stint in Brisbane's New Farm clinic and attended his first training session at VFL club Casey on Tueday as part of a two-week trial.
Lynch said it was a disappointing turn of events that wouldn't help his chances of securing a contract with the Scorpions.
"I'm just as confused as you are, Lynch told 3AW radio.
"I've felt that generally Brendan has made some really big leaps forward and as I've said in recent weeks, I think he's commitment to stay in the rehabilitation clinic has been outstanding. It's been a really difficult period for him and it was the right step to getting back on track.
"I'm very disappointed that he was there."
"I'm sure that Casey would be disappointed and I'm sure there will be discussions going on at training tonight about whether there's any action.
"In short, it wouldn't help things I'm sure. They would be very keen to have a discussion with Fev about what he was thinking."
Fevola turned up at Casey for his second outing on the training track on Thursday night, where the club immediately called a meeting.
The training session was later relocated to a nearby rugby field.
The 30-year-old, who is working to overcome alcohol and gambling addictions as well as battling depression, was sacked by the Brisbane Lions in February following his arrest for public nuisance on New Year's Eve.
The club confirmed on Monday it had reached a confidential financial settlement with Fevola, which would allow the forward to pay off some of his debts.
Lynch said he had raised the possibility of the Lions spreading his termination payment over a number of payments rather than in a lump sum, which could prove dangerous for a gambling-addict.
"I can't go into any real details but that was something I suggested- spreading the payment over a period of time.
"But it wasn't able to be done and I can't go into too much more details over the settlement."
Fevola is also set to embark on a short holiday overseas to Los Angeles, despite his manager's recommendation that he stay in Melbourne to focus on more important things like his children and potentially a VFL career.
"In the last week it was my strong recommendation that he doesn't go away at the moment.," Lynch said.
"Now I understand he's been through a really difficult time and needs a break but I think there's some real priorities for him and I don’t think going overseas just at the moment should be a priority."
Correction: The original version of this story may have given the impression Alsatair Lynch was disappointed with the Brisbane Lions over their handling of Brendan Fevola's termination payment. On further examination of the interview, we have found this not to be the case. The error was made in the sub-editing process. We apologise to all parties concerned.
