Downing Street is poised to announce a crackdown on high-speed, high-stakes gambling machines, with fresh penalties for bookmakers if they fail to enforce new limits on playing times and betting losses, the Guardian has learned.

Such is the rising concern over the spread of fixed-odds betting terminals (FOBTs), sometimes known as the "crack cocaine of gambling", that last month the prime minister personally ordered civil servants and the gambling regulator to toughen up a new industry code of conduct.

In correspondence between Downing Street and the gambling industry in March, seen by the Guardian, David Cameron said the bookmakers' new code – which introduces pop-up alerts which flash on gaming machine screens when a customer has spent £250 or played for 30 minutes – needed to be "strengthened to minimise harm".

The code, introduced in February by the Association of British Bookmakers, was meant to tighten betting controls and defuse criticism of FOBTs, on which punters can bet up to £300 a minute. Since 2010, annual player losses on FOBTs have grown from £1.3bn to £1.5bn, and the machines now account for half of bookmakers' gross profits.

There has been increasing concern about the social cost of the machines. There are about 33,000 FOBTs in Britain.

This week Cameron is due to announce a clampdown on the terminals, with a range of regulatory and planning powers to curb the clustering of shops. These moves come a month after the chancellor's surprise 5% tax increase on the betting machines in the budget.

The prime minister's personal interest in the matter has rung alarm bells in boardrooms. In the letter, Cameron questioned whether the industry limits were too high and asked the Gambling Commission, the regulator, to see whether they should be reduced.

He also proposed making the strengthened measures part of the operating licence – essentially making the new code mandatory rather than voluntary, as the industry had wanted.

It would mean that if the regulator found bookmakers' staff failing to intervene when punters lost too much money or not questioning why machines were played without a break, the shop could be closed down.

According to reports, Cameron is also poised to tackle the issue of the concentration of bookmakers in the poorest areas of the country when he makes his announcement this week.

The Guardian has been given research by Geofutures, a data analysis company, which identifies the high streets in England that are most densely packed with bookmakers' shops. London's Chinatown topped the rankings, followed by Newcastle, Rotherham and Bradford – all of which have high unemployment and above-average levels of deprivation. These city centres now appear over-reliant on betting: Newcastle has 16 bookmakers' shops within a few minutes' walk of each other.

Separate internal company documents from Ladbrokes, also seen by the Guardian, appear to confirm concerns about the relatively high limits on playing times and betting losses on FOBTs.

In what is said to have been the first attempt by a leading bookmaker to analyse the betting patterns on its machines, Ladbrokes found in April last year that punters played its FOBTs 4.8m times, staking £1bn, over a four-week period.

The data suggests that 92% of sessions on FOBTs would not receive any warnings under the new code because the playing time would not exceed 30 minutes of uninterrupted betting.

Even worse is that it appears that the £250 limit on player losses, meant to trigger a warning pop-up and a visit from a member of staff, would require hours of solitary continuous play. The Ladbrokes analysis shows that the average loss per "60-minute or over" session of roulette is a little more than £93, well below the proposed £250 cap.

It is now widely accepted within Whitehall that the machines take addictive casino games, speed them up and then let punters lay large bets in rapid succession. The gambling industry regulator warned last year that with FOBTs, "even normal leisure gamblers [are] exposed to potentially harmful rates of loss whether or not they would be classified as problem gamblers".

Critics say that the government should take bolder action. A spokesman for the Campaign for Fairer Gambling pointed out that "criminality and the negative impact on local economies has led to councils taking action to protect their communities, with 63 councils signing up to demand action from government".

He said: "Northern town centres like Newcastle, Bradford and Rotherham have the highest density of betting shops, so this isn't just a problem for London, it is a problem that is spreading across the country."

The spokesman said the government should learn the lessons of the past. "The code of conduct is the industry's second attempt to self-regulate in just 10 years. No methodology has been provided to support how it was derived and there is little point in making it mandatory when it will be ineffective."

When contacted, Ladbrokes said it recognised some of the figures but would not comment further about internal company reports.

A spokesman from Ladbrokes said: "Given the vast majority of machine play is not problematic and is under 20 minutes and at low stakes, we would not expect most sessions to be impacted by mandatory limits. We look forward to an evidence based dialogue with Government and the Commission to ensure the correct balance between ensuring uninterrupted play for the majority and targetted intervention for those displaying problematic behaviour."

The Association of British Bookmakers denied that it targeted poorer areas, and said it was "important that both the industry and government act on the basis of evidence".

It said: "The new code of conduct was brought forward following extensive consultation with the industry, treatment providers and academics. It was from these discussions that the range of measures, which includes the introduction of voluntary limits and mandatory alerts, were agreed. The code itself has been described as 'world leading'. We believe it will make a real difference to ensuring our customers gamble responsibly and in an informed manner."

The industry says it takes seriously the issue of violence and is working closely with many police forces across the country on reducing crime. An ABB spokesman said crime in London betting shops fell by 32% between 2010 and 2013.

"Although there is some evidence that LBO-associated [licensed betting office] crime is falling, particularly in some deprived areas, we take any incidents of violence in shops very seriously. It is often forgotten that our shop staff are not the cause of crime but that they are the victims."

• This article was amended on 17 April 2014. The earlier version said "Betting shops have boomed during the downturn, doubling their presence on the high street over the past five years. Bookies now account for 9% of high street floorspace, up from 4% in 2008." That information was based on details in a press release issued by Estates Gazette. Estates Gazette now says that was inaccurate, and that what its data does show is that leases for premises in its "negative clusters" category (which include bookies, pawnbrokers and charity shops) accounted for 9.1% of all high street property deals signed between July 2012 and June 2013, up from 4.1% of those signed in the 12 months to June 2008. It adds that the number of deals signed in relation to betting shops alone in 2012-13 was 77% greater than the number signed in in 2007-08.