Offshore gambling sites blocked online_1

The nation's communications watchdog will block illegal gambling websites hosted offshore under new powers now in effect.

Australians spend up to $400 million on the dodgy sites each year and often have difficulties recouping their winnings or deposits.

The Australian Communications and Media Authority will investigate suspect sites and if unable to take enforcement action, refer them to internet providers in Australian to block them.

Federal Communications Minister Paul Fletcher says the sites accounted for about $100 million in lost tax revenue each year.

"Too often these offshore operators are defrauding Australians and their websites typically provide very few, if any, harm minimisation controls," Mr Fletcher said.

The ACMA's new powers fulfil one of three legislative recommendations that came out of a 2015 review of interactive gambling.

The review, overseen by former NSW premier Barry O'Farrell, made 19 recommendations to the government.

It raised a number of problems with the sites, including that they lacked Australian consumer protections and had links with organised crime.