William Hill has been fined a record £19m for “widespread and alarming” social responsibility and anti-money-laundering failures that were revealed just days before long-awaited reforms of Britain’s gambling laws are finalised.

The 88-year-old bookmaking brand, owned by 888 Group, admitted a string of transgressions, including allowing customers to lose tens of thousands of pounds within minutes of opening an account.

Some of the most extreme examples took place during Covid-19 lockdowns, when the Gambling Commission, which regulates the industry, had warned bookmakers and casinos against exploiting vulnerable people shut indoors for long periods.

The failures also continued after the government launched a landmark review of gambling laws that has led the industry to promise to improve safety standards.

The Guardian understands that the “write round” process, where government departments approve the reforms, will begin this week, with a white paper due to be published in April.

William Hill and its sister brand Mr Green will pay a total of £19.2m, which is the largest penalty in the commission’s history but equates to less than four days of revenue for their parent company, 888, which won £1.8bn from punters last year.

The previous largest fine was £17m imposed last August on Entain, the gambling firm behind Ladbrokes and Coral.

The regulator said it had considered suspending William Hill’s licence but this was avoided after the company worked rapidly to make changes. The commission has never suspended the licence of a big operator, although it has the power to do so in response to repeated transgressions.

Mr Green, William Hill and 888 have incurred significant fines from the Gambling Commission in recent years, including a £3m fine for Mr Green handed down in February 2020. The failures at William Hill’s brand that have led to the new record penalty continued for at least a year after that.

They included allowing one customer to open a new account and spend £23,000 in 20 minutes; allowing another to open an account and spend £18,000 in 24 hours; and allowing a third customer to spend £32,500 over two days – all without any checks.

The commission said the company failed to carry out checks at an early stage in the customer’s journey, which meant one user lost £14,902 in 70 minutes.

William Hill was also found to have failed to identify risk of harm or intervene with certain customers earlier enough – one lost £54,252 in four weeks without the operator seeking income evidence or carrying out adequate checks. The firm also failed to apply a 24-hour delay between receiving a request for an increase in a credit limit and granting it: one customer was allowed to immediately place a £100,000 bet when his credit limit had been set at £70,000.

The Gambling Commission chief executive, Andrew Rhodes, said: “When we launched this investigation the failings we uncovered were so widespread and alarming serious consideration was given to licence suspension.

“However, because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history.”

Ineffective controls allowed 331 customers to gamble with WHG (International) Ltd despite having self-excluded from Mr Green.

Anti-money-laundering failures included allowing customers to deposit large amounts without conducting appropriate checks. One customer was able to spend and lose £70,134 in a month, while another lost £38,000 in five weeks and a third lost £36,000 in four days.

William Hill was bought by the online casino company 888 Holdings from the Las Vegas company Caesars in a £2.2bn deal in 2021.

An 888 spokesperson said: “The settlement relates to the period when William Hill was under the previous ownership and management. After William Hill was acquired, the company quickly addressed the identified issues with the implementation of a rigorous action plan.”

The 888 chief executive, Itai Pazner, was removed earlier this year, amid an internal investigation into separate failures to follow anti-money-laundering processes.

“The entire group shares the Gambling Commission’s commitment to improve compliance standards across the industry and we will continue to work collaboratively with the regulator and other stakeholders to achieve this,” 888 said.

Since the start of 2022, the Gambling Commission has concluded 26 enforcement cases, which resulted in operators paying more than £76m because of regulatory failures.

Rhodes said: “In the last 15 months we have taken unprecedented action against gambling operators, but we are now starting to see signs of improvement. There are indications that the industry is doing more to make gambling safer and reducing the possibility of criminal funds entering their businesses.

“Operators are using algorithms to spot gambling harms or criminal risk more quickly, interacting with consumers sooner, and generally having more effective policies and procedures in place.”