Australians will no longer be allowed to use their credit cards to place bets online as the government moves to tighten industry regulations to stamp out harms caused by gambling.

Under new laws that came into effect on Tuesday, the use of credit cards, including ones linked to digital wallets as well as digital currencies such as Bitcoin, will be outlawed for online wagering.

Companies face fines of up to $234,750 if they fail to comply.

The online gambling industry was given six months to adjust to the transition.

Communications Minister Michelle Rowland said the changes would help to protect vulnerable Australians and said the government would announce further reforms in due course.

“Australians should not be gambling with money they do not have,” Ms Rowland said.

“Last year, the Albanese Labor government committed to banning credit cards for online wagering – and we’ve delivered.

“This ban builds on the significant progress to minimise gambling harm that the Albanese government has made over the past two years which is already benefiting thousands of vulnerable Australians.”

Australians lose about $25bn to legal forms of gambling each year, representing the largest per capita losses in the world, according to the Australian Institute of Health and Welfare.

The credit card ban follows recommendations put forward by a parliamentary inquiry that called for a total phase out of gambling ads over the next three years.

In its submission, Responsible Wagering Australia, which represents online wagering companies, including Bet365, Sportsbet, and Unibet, supported the new credit rule but pushed for an extension to cover online lotteries and Keno.

“If consumer protection measures aren’t consistent across all forms of gambling it will incentivise vulnerable Australians to move to less-regulated types of gambling, where they are more at risk of harm,” chief executive Kai Cantwell said

About two in five adult Australians gamble at least weekly, with nearly half of Australian men spending money on gambling activities in a typical month.