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Online betting firm Betway has been hit with a record penalty of £11.6m for failings over customer protection and money-laundering checks.

The Gambling Commission said Betway failed to check the source of funds of one customer who deposited over £8m and lost over £4m in a four-year period.

It also failed to effectively interact with a customer who deposited and lost £187,000 in two days.

The penalty package is the biggest to date faced by a UK gambling firm.

The Gambling Commission's investigation said the failings were linked to dealings with seven of Betway's high-spending customers.

It said that "as a result of a lack of consideration of individual customers affordability and source of funds checks, the operator allowed £5.8m of money to flow through the business which has been found, or could reasonably be suspected to be, proceeds of crime".

The commission said the investigation had also revealed "inadequate management oversight", adding that a probe "into responsible Personal Management Licence holders" was continuing.

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

"As part of our ongoing programme of work to make gambling safer, we are pushing the industry to make rapid progress on the areas that we consider will have the most significant impact to protect consumers," he added.

"The treatment and handling of high-value customers is a significant piece of that work and operators are in no doubt about the need to tackle the issue at speed."