The Wanderers chairman, speaking at the European Football Finance summit in London said that the Midlands club should have been sanctioned having cut their debts and gone into administration.
"I have a problem with clubs passing on their debts and then coming out again and competing at the same level," Gartside said.
"In my opinion, Leicester have had an unfair advantage while a vast percentage of other clubs are trying to do things in an honest way. There is nothing illegal about it but we're trying to run our businesses on a proper commercial basis and then someone comes along and slashes their debt in half. That's unfair competition.
"I think stringent sanctions should be applied, not just points deduction but even relegation. A club who goes into administration, re-structures and gets back into the top league on the basis of ditching their debts is unfair. We built a new ground at Bolton and we've still got debt." he added