A new regulatory system meant to allow staff at betting shops to identify and bar problem gamblers has been criticised as ineffectual by addicts and campaigners.

From this week bookmakers will have to conduct local area risk assessments to explain how they are going to mitigate crime and the effect on vulnerable people. Significantly, they will have to share information on problem gamblers who have “self-excluded” themselves from betting shops.

The change means that for the first time addicts will only have to fill in one form to block themselves from all gambling operators’ shops in an area. The move was announced last year by the regulator, the Gambling Commission, after industry consultation to “strengthen social responsibility”.

At the heart of the debate is the spread of fixed-odds betting terminals (FOBTs), which are disproportionately found in poorer parts of Britain and generated £1.7bn in revenue for bookmakers last year.

Each betting shop is allowed to have up to four FOBTs – described by critics as the “crack cocaine of gambling” – that allow stakes of up to £100 to be laid on casino games with a maximum delay of just 20 seconds between wagers.

A man playing a fixed-odds betting terminal in a branch of William Hill. Each betting shop is allowed to have four FOBTs. Photograph: Alex Segre/Alamy

Gamblers struggling with addiction however, say the scheme will not work. Tony Franklin, 44, said he had excluded himself from all bookmakers, but that his addiction had cost him his home and job. Last year, after losing thousands of pounds in a matter of minutes, he had what he described as a “meltdown and collapse”.

Diagnosed by a psychiatrist as having pathological gambling disorder, he was signed off work and now lives on benefits. Once a corporate salesman, his biggest monthly pay cheque was £13,000.

“I am looking to declare myself bankrupt. With an addiction you cannot control your losses. The red mist just comes over me and that’s it, I’m lost,” he said.

Franklin took extraordinary measures to stop his addiction, such as writing to betting chain chief executives demanding he be banned from their shops. He even got bookmakers to issue trespass notices against him.

He said, however, that he was always allowed to bet in the end. “Any self-exclusion system based on paper is flawed because it relies on a person in one shop recognising you. That just doesn’t happen. I have self-excluded myself, taken extreme steps but I still have ended up having a meltdown,” he said.

The scheme was trialled in Chatham in Kent last year with mixed results. Gamblers were allowed to ban themselves from all betting shops in the town by filling in just one form. An investigation by the BBC, however, found that eight of the 10 bookmakers did not prevent a journalist from gambling on their premises despite the fact that he had signed up to be excluded.

A spokesman for the Association of British Bookmakers said: “The new self-exclusion scheme, rolled out nationally this month, is a significant advance on the previous scheme under which a customer had to enter into an individual agreement with each betting shop.

“Now there is a freephone helpline with a one-stop process for self-exclusion. Given that there are over 8,000 betting shops in the UK, developing a one-stop shop for self-exclusion has involved significant investment on the part of betting shop operators . We will continue to refine and build on this programme over time.”

A spokesman for the Campaign for Fairer Gambling said: “The current system is flawed as it relies on staff memorising dozens of self-excluded customers from each betting shop. The new system is still paper-based so nothing will improve. The only difference is instead of having to go to each bookmaker to fill in a separate form, you can now just fill in one form.

“But what good is this when the breach rate is so high as the system relies on staff recognition? Surely it’s time for the government and the Gambling Commission to wake up to the fact that almost all self-exclusions relate to FOBTs, so reducing the maximum stake from £100 a spin would reduce problem gambling.”