Online gambling firms are tempting punters with bogus offers and cheating them out of their winnings, warned the competition regulator.
The Competition and Markets Authority (CMA) said it would take enforcement action "against a number of online gambling operators" it suspects of breaking consumer laws.
The CMA also said the firms were unfairly holding onto people's money, offering bogus cash offers and stopped people taking cash out of their accounts.
The watchdog added: "Customers might have to play hundreds of times before they are allowed to withdraw any money, so they don't have the choice to quit while they're ahead and walk away with their winnings when they want to."
The watchdog began its probe into online gambling last year and said it has talked to more than "800 unhappy customers" and a range of online firms. The industry is worth £4.5bn a year and sees more than 6.5 million people regularly log on to betting websites.
The body said it has concerns that some firms have minimum withdrawal amounts far bigger than the original deposit punters were asked to place, or that other hurdles are placed in the way of them withdrawing their money.
The CMA said: "Having identified a number of operators engaging in practices likely to be breaking consumer law, the CMA is now taking enforcement action and has a range of powers at its disposal to bring any illegal activities to an end."
Nisha Arora, CMA senior director for consumer enforcement, added: "We know online gambling is always going to be risky, but firms must also play fair. People should get the deal they're expecting if they sign up to a promotion, and be able to walk away with their money when they want to."
"That's why we are today launching enforcement action where we think the law has been broken. We are also asking people who have had difficulties withdrawing their money when they've gambled online to tell us about it, and help probe this issue even further."
The CMA has been in touch with a number of as-yet unnamed companies to demanded changes to specific practices.
If the watchdog feels that adequate measures have not been taken, it can take companies to court, where the penalties range from a large fine related to a percentage of revenues or the removal of its right to operate in the UK.
Senior lecturer in e-commerce in the Kent Business School at the University of Kent Dr Des Laffey welcomed the move by the CMA.
He said: "The CMA found that 'Customers might have to play hundreds of times before they are allowed to withdraw any money'. Of course, this then makes the gambling advice quit while you are ahead impossible to implement, even if someone wanted to."
Laffey added: "The terms and conditions for new gambling customers should be clear and fair."