The widow of a man who took his own life after becoming addicted to gambling says more people will die because the regulator is refusing to investigate suicides linked to the addiction.

Annie Ashton is planning legal action against the Gambling Commission after it said it would not investigate or penalise Betfair over the death of her husband, Luke – despite concerns raised about the company at his inquest.

Ashton, 43, said a coroner’s verdict naming Betfair and criticising its safeguarding should have prompted an investigation by the regulator and sanctions. She said she was appalled to receive a letter from the Gambling Commission earlier this month saying it would not be taking further action on his case.

“More people will die because they’re not actually looking at the people that it’s destroying,” she told the Guardian.

“I just think they’re just unfit for purpose. They should not be the regulatory body. They’re too tied up with the industry. I absolutely dread to think what someone would have to go through for it to be investigated.”

Ashton’s case made history as the first where a gambling operator was formally involved in an inquest after the coroner made Flutter, the parent company of Betfair, an “interested person” in the proceedings.

The coroner criticised its failure to intervene to address the chronic gambling problem in the lead-up to Luke’s suicide. In a landmark verdict after the inquest in June, the Leicester coroner, Ivan Cartwright, ruled that “gambling disorder” had contributed to his death.

Cartwright said Betfair did not “interact or intervene with Luke in any meaningful way” in the two years leading up to his death and that “more efforts to intervene or interact should have been made”.

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Cartwright issued a prevention of future deaths notice in July requiring action from Flutter but the company has faced no sanctions from the regulator in relation to Ashton’s case.

Ashton sent a legal letter to the Gambling Commission after the inquest asking them if they would investigate and penalise the company, given the coroner’s verdict. The commission responded that it was not its role to investigate individual complaints.

An investigation is a first step before any sanction. Ashton said that if the Gambling Commission was functioning as a regulator, Betfair “should have had their licence taken off them whilst they were being investigated” after the inquest and that “there should have been some serious consequences” for the company.

“How much worse does it actually have to get before the Gambling Commission switches that switch and investigates? It doesn’t seem like they’re ever likely to,” she said.

Luke was on furlough from his job in a printing company when the grip of his gambling addiction worsened and he began placing more than 100 bets a day on his phone in secret.

The coroner said he was “perplexed” that the betting company’s algorithm designed to protect vulnerable users did not flag Luke given his “intensive” betting.

Ashton said: “It’s just quite shocking that they considered him a low-risk gambler.”

Luke had opted out of marketing from Betfair after 2017. Despite this, he still received a monthly £5 free bet available to all users from Betfair.

Betfair gave evidence at the inquest that only 2.1% of its customers received a human interaction in 2021 but evidence from the economist Prof David Forrest said that 18% of gamblers had been found to be at risk.

After the inquest it emerged that Betfair had been in special measures at the time Luke was gambling and died, but this was not disclosed by the Gambling Commission either at the time – or during the inquest itself.

Ashton said: “We don’t know how many times Betfair have been in special measures, how many times they failed their regulatory requirements and we should know, because actually that becomes a question of, should they have a licence?”

Ashton, who now campaigns for the charity Gambling With Lives, which represents bereaved families after gambling-related suicides, said she thought the regulator was failing to protect vulnerable customers.

“You get the sense that the Gambling Commission is there to give support and protect the gambling operators, more so, in my opinion, than the consumer, which really does then lead into the question of whether this regulator is fit for purpose when you’ve got deaths that are occurring under their watch.”

Dan Webster, a lawyer at Leigh Day working on a legal challenge of the commission’s refusal to take regulatory action in Ashton’s case, said: “Purportedly, the Gambling Commission recognises the importance of investigating gambling-related suicides because it requires operators to tell the commission when they become aware of a customer dying by suicide. But this case offers no suggestion that the commission is actually committed to learning lessons from those most shocking cases.”

He added: “As things stand, there’s no meaningful consequence for Betfair, other than embarrassment and rightful condemnation … It all gives the impression that the Gambling Commission are more worried about regulating in a way that appeases the industry than in a way that actually protects customers from harm.”

Flutter said it had changed its controls since then and that a customer with a similar betting history and pattern of play would not be able to lose the same amount of money.

A Gambling Commission spokesperson offered “sincere condolences” to Luke’s family and friends, and said: “When we became aware of Luke’s death in July 2021 it became apparent that his gambling occurred during a time in which the operator had been in special measures because of social responsibility and anti-money laundering issues.

“As a result of the special measures process the operator divested £635,123 to charities furthering the national strategy to reduce gambling harms. Taking into account the action we have already taken and that new regulatory requirements are now in place, it was considered that no further action would be taken against the licensee in respect of this matter.”

The regulator said it would continue to take enforcement action and challenge the industry in line with its statutory duties.

A Flutter spokesperson said: “We reiterate our sincere condolences to Mrs Ashton and her family over this tragic case. Flutter UKI holds itself to the very highest standards in our industry and we have made a number of changes to our controls and player protections since early 2021.”

They said they could not comment further because of live legal proceedings.