The regulator said that Betway has shown “inadequate management oversight” after allowing £5.8m to flow through the business which was, or could reasonably be suspected to be from the proceeds of crime.

The Gambling Commission said the online bookmaker must establish a “package of measures” for a string of social-responsibility and money-laundering failings which were linked to high-spending or VIP customers.

Betway must pay a total of £11.6m, consisting of a £5.8m payment in lieu of a financial penalty and the return of £5.8m to the victims of crime.

Some of the offenses were committed as recently as this month.

The regulator found that in one instance, Betway had failed to conduct checks on a VIP customer who ad disposited £8m and lost more than £4m through betting, over a period of four years.

Despite the customer’s deposits and pattern of gambling being flagged internally several times, Betway failed to check how he could afford to bet so much – a condition of a gambling license.

The customer’s suspicious pattern of gambling caused enough concern to be raised to the Betway’s board, but it decided to allow him to continue to bet. Betway only stopped taking the man’s money when it was approached by the police who were investigating the customer.

In total, three of Betway’s highest-rolling customers have been the subject of police investigations and after the conclusion of police investigations, police concluded that stolen money had been gambled online with Betway, The Times reports.

The Gambling Commission said that the continuous and systematic nature of Betway’s failures and the involvement of middle and senior management meant that it was likely that other customers had bet with stolen money or had not been stopped from losing money despite displaying gambling problems.

Richard Watson, executive director at the Gambling Commission, said: “The actions of Betway suggest there was little regard for the welfare of its VIP customers or the impact on those around them.”

Mr Watson said the cases illustrated why operators’ management of high-value customers must change and why the industry must do everything to interact with customers responsibly.

Betway has now implemented “new resources and policies” to handle the problems identified and is engaging with The Gambling Commission to ensure improvements are implemented. It said it had co-operated fully with the commission’s investigation.