Gambling companies will now face tougher action if they mislead their customers by using unfair small print.
They will also be fined for breaking advertising rules and must respond to customer complaints within eight weeks.
The Gambling Commission tightened regulations after customers complained that small print allowed companies to withhold winnings.
An industry trade body said this should help restore public confidence in the sector which is “at a low ebb”.
Radio 4’s You and Yours programme has been hearing complaints from listeners about misleading terms and conditions attached to free bets.
Disgruntled punters have said they were often allowed to place huge stakes with no checks until they win. When they tried to withdraw their winnings, the company refused, citing terms and conditions hidden away on their websites.
Gabriel Gordon said he saw a special offer on PlayHippo.com, which showed that if he deposited £150 or more the company would match it.
The rules said he would have to play 35 times before he could withdraw, but he did not realise that hidden away on the website was a set of terms and conditions, limiting the amount he could bet.
He won £1,700, but PlayHippo.com refused to pay him owing to these rules hidden in the small print.
“Little did I know that buried away in a completely different part of the website, were pages and pages of terms and conditions, basically a safety net for them, I think, so they could just call on them and say you’ve broken this, this and this, and we’re not going to give you your money,” he said.
PlayHippo.com, which is based in Malta, did not respond to requests for a comment.
Earlier this year, a Competition and Markets Authority (CMA) investigation concluded that gamblers had been treated unfairly, and said punters must be able to cash out when they wanted, and not have to play more to release winnings.
It said that “gambling firms must now stop unfair online promotions that trap players’ money”.
Other changes the Gambling Commission, which has the power to issue hefty fines, has now highlighted include:
- Companies will be fined if they break advertising rules, including advertisements created by third party marketing affiliates
- Gambling firms will have to respond to consumer complaints within eight weeks – previously there had been no deadline in place
- Gambling firms can no longer send spam texts or emails to customers.
The regulator has also issued new standards for Alternative Dispute Resolution Services (ADRs) in the gambling industry. An ADR can help customers if they are not happy with the result of a complaint to a gambling business.
Customers had complained ADRs were not independent, and followed the operator’s misleading small print when making their decisions.
The regulator hopes the new guidance – that ADRs must publish complaint data and make public their methodologies and decisions – will give customers more confidence in them.
Ian Angus, programme director of consumer protection at the Gambling Commission, said: “If a customer thinks they have been treated unfairly, they can complain to the operator. If they are not making any headway on that front, and if customers believe a company has broken our rulebook, we want to hear from them.”
Clive Hawkswood, from the Remote Gambling Association, which represents online gambling companies, said: “Public confidence in the gambling industry and the way it is regulated can fairly be described as being at a low ebb.
“We hope these new measures combined with a range of industry initiatives will be effective in improving safeguards for customers and helping to reassure everyone that consumer protection will be at the heart of everything we do.”