Linda Aldred placed the bet, which had longshot odds of 200-1, in memory of her husband, whom she described as a "betting man."
"I thought it would be a good idea as Sam's grandad Eric was a betting man, so my sister and I thought we would put down a bet together in his memory," Aldred told the Thanet Times about her wager with British bookie Betfred. "We had never been in a betting shop before. The bet was for Sam to win any medal. As I walked out I said 'this one is for Eric,' but I considered the bet already lost."
Oldham won bronze at the 2012 Olympics, but because the medal was won in the team competition, Betfred would not pay Aldred the £1,000 she thought she won.
A photo of Aldred's betting slip is not clear enough to make out whether her wager specifically indicated that she bet on Oldham winning an individual or team medal.
"I went back to the shop and I asked if my bet was finished and they said it was and the bet was void as Sam had won the medal as part of a team not as an individual. I was stunned," she told the Thanet Times. "I am really happy Sam won. It is more the principle than the money, but I could have used the winnings to pay for my ticket to see Sam at the 2016 Olympics in Rio."
Frustrated with the decision, Aldred took her case to the Independent Betting Adjudication Service, a British betting dispute agency.
An IBAS spokesman would not comment on the matter when contacted by The Telegraph.
"We have been handling a number of bets relating to athletics and the Olympics and they will be dealt with through the normal procedures," the spokesman told the tabloid.
A Betfred spokesman said it was working with IBAS on Aldred's bet.
"We are currently in discussion with IBAS and we hope to come to a satisfactory conclusion for all concerned," the spokesman told The Telegraph.