Plans to tackle "pyramid cons" have been included in the Queen's Speech.
The government is planning sweeping reforms of gambling laws
The government plans to make so-called "chain gifting" schemes, which act like chain letters, illegal.
The schemes work by asking participants to give cash to another person whose name is at the top of a list.
That person is then removed from the list and the new person is added to the bottom in the hope they will move up the order and receive more cash.
Most people who take part in the schemes lose out because of the need for an infinite number of new members to join.
The draft Gambling Bill will include six month jail sentences or fines of £5,000 for people found guilty of profiting from such schemes.
Further clauses in the bill will relax advertising rules for casinos and new laws on gambling in pubs and clubs.
Major sections of the Bill were published last week, and included stricter controls on access by children to places where gambling takes place and a new industry-funded trust to support problem gambling, prevention and
They also cleared the way for Las Vegas-style casinos, with plans to have no restrictions on where casinos can be set up, and membership of a gaming or bingo hall at least 24 hours before playing will no longer be required.
Remote gambling, via the Internet, mobile phones or interactive television, will be licensed and regulated in Britain for the first time.
There will be strict controls on children's access to venues and a fund paid for by the industry will help people with a gambling problem.
The first parts of the Bill, announced in July, covered the setting up a new Gambling Commission to replace the Gaming Board.