Gala Interactive will pay £2.3m after failing to take action over two problem gamblers, who gambled away around £1.3m of stolen money.
One customer lost £837,545 over 14 months and the other lost £432,765 over 11 months while playing Gala’s online games.
The Commission said Ladbrokes Coral, which owns Gala Interactive, failed to have in place written policies and procedures that could have curbed the players’ problem gambling.
The penalty package comprises a £1m payment to fund research relating to the causes of problem gambling and £1.3m for the customers, who have since received jail sentences.
Ladbrokes Coral also volunteered to pay a further £200,000 to fund problem gambling research.
Sarah Harrison, chief executive of the Gambling Commission, said: “We will continue to take robust action where we see operator failures that harm consumers and the wider public.
“It is the responsibility of all operators – particularly key decision makers in those companies – to ensure they are protecting their customers and step in when there is behaviour that might indicate problem gambling.
“This did not happen in this case and the £2.3m penalty package should serve as a warning to other operators.”
Jim Mullen, CEO of Ladbrokes Coral said it was clear that the firm had not “met our own standards or those demanded by the Commission”.