Staff at bookmaker Paddy Power encouraged a customer to continue to place bets despite being aware of signs that he had a serious gambling problem, a report reveals.

The man was allowed to keep using Fixed Odds Betting Terminals (FOBT) - known as the 'crack cocaine' of gambling - until he had lost five jobs, his home and access to his children.

The report by the Gambling Commission also found the company had failed to perform adequate checks to ensure customers were not using its machines to launder the proceeds of crime.

Betting problem: Customer A was allowed to keep using Fixed Odds Betting Terminals - known as the 'crack cocaine' of gambling - at Paddy Power until he had lost his jobs, home and access to his children. File image

It concludes that the issues identified are 'likely to form the basis for future compliance assessments of gambling operators.

The problem gambler, identified as 'Customer A', was a frequent user of FOBTs, which have caused untold misery by allowing users to stake £100 a time on games including roulette and poker.

They are so addictive they have become known as the 'crack cocaine' of gambling.

Previous figures reveal that Paddy Power's weekly FOTB profits went up 4 per cent from £1,319 in the first six months of 2014 to £1,373 in the first six months of 2015.

In early 2014, regional Paddy Power staff decided to look into the source of the customer's money to check he was not involved in money laundering.

However they failed to investigate properly. They accepted the customer's account that he or his family owned a number of restaurants, although they had no further details.

Over the coming weeks staff became concerned the man might be a problem gambler.

In May 2014 staff found out that Customer A was working five months to fund his spending on the FOTBs and that he had no money.

TALE OF CUSTOMER A'S DOWNFALL Early 2014: Regional Paddy Power staff decide to look into the source of 'Customer A's' money to check he was not laundering money. Over the coming weeks they become aware he might be a problem gambler. May 2014: Store employees find out the customer is working five jobs to pay for his bets. They are told by a senior staff to monitor the customer's spending. May 20, 2014: Branch manager tells his superiors the customer would be visiting less frequently. Senior member of staff said 'steps should be taken to try to increase Customer A's visits and time spent in the gambling premises.' Branch staff noticed that Customer A looked 'unwell' and 'as if he had not slept'. August 2014: Member of staff meets Customer A on the street and learns he has lost all of his jobs, is homeless and lost access to his children. Advertisement

However he told staff at the branch that he was comfortable with his level of spending, and senior staff advised continued monitoring.

On May 20, the branch manager informed his superiors that the customer would be visiting less frequently.

In response the senior member of staff said 'steps should be taken to try to increase customer A's visits and time spent in the gambling premises,' according to the report.

The branch manager noted that he was uncomfortable with this advice but said he would provide good customer service in the hope the customer might spend more once he was in a better position in the future.

Staff subsequently noticed that Customer A - who continued to say he was comfortable with his betting - was spending heavily and that he looked 'unwell' and 'as if he had not slept in a while'.

It was only in August 2014, some six months after staff first raised their concerns, that Customer A was first directed to resources for those with gambling problems.

The report describes how a member of staff bumped into Customer A outside of the store and learned he had lost all of his jobs, was homeless and had lost access to his children.

Customer A did not visit the shop again.

Paddy Power initially said it was satisfied that staff had followed social responsibility procedures and that Customer A had been directed towards necessary resources. However the report found this was not reflected in evidence.

The bookmaker also accepts that the advice to encourage Customer A to spend more in May 2014 was 'erroneous' and conflicted with its policies to prevent gambling being a source of harm.

In response to the findings, Paddy Power agreed to a voluntary payment of £280,000 to a 'socially responsible cause' in lieu of a financial penalty.

'Crack cocaine of gambling': Paddy Power's weekly fixed odds betting terminals' profits went up 4 per cent from £1,319 in the first six months of 2014 to £1,373 in the first six months of 2015 (file image)

It will also contribute to the costs involved in investigating the matter and committed to amending the policies to address the failures identified in the investigation.

A spokesman for Paddy Power Betfair said: 'The historical failings outlined in this report were clearly unacceptable. Paddy Power has since significantly strengthened its internal procedures and staff have been retrained to ensure these procedures are implemented effectively.

'Paddy Power Betfair takes its responsibilities extremely seriously and we have co-operated fully with the Gambling Commission at every stage of this process.'

In December of last year, the Metropolitan Police said it had recorded hundreds of violent incidents including assault linked to the machines.

One FOBT addict, Lee Murphy, committed suicide last year after losing up to £30,000 a year on the terminals.

MailOnline has contacted Paddy Power for comment.