The Albanese government is trying to secure support in the Senate to pass gambling reforms that limit betting ads to three per hour on free-to-air television between 6am and 8.30pm.
Parliament will return on Tuesday after a five-week mid-winter break.
The coalition, Greens and some independents don't believe the proposals to curb gambling harm go far enough and are pushing for tighter restrictions in return for their support.
Greens senator Sarah Hanson-Young said she would negotiate on some key sticking points, such as an opt-in for gambling ads online.
But she drew a red line on inducements to bet, which she said should be eliminated from the gambling sector.
"I've said to the government, if you are not prepared to do what's needed here, we'll take this out of your hands and we'll do it in the Senate ourselves," she told ABC's Insiders program on Sunday.
"The majority of senators know that what the government has put on the table is not good enough, including a bunch of their backbenchers.
"I'm not prepared to vote for what's on the table at the moment."
A group of Labor backbenchers has joined the push for gambling laws to be strengthened after a parliamentary inquiry heard shocking testimony of alleged predatory practices by betting companies.
They included representatives of major firms offering inducements such as drugs and sex workers, claims the industry has strongly refuted.
Senior government figures insisted the right balance had been struck on reform, saying the changes put forward to parliament were the strongest to date.
Labor minister Jenny McAllister said the government had been discussing possible changes with the coalition to pass the legislation.
"We think we've broadly got the legislation right, but if there are sensible amendments that could improve the bill, of course, we're open to discussion across the parliament," she told News24.
Senior opposition figures have also called for tougher regulations, including regarding inducements.
Shadow treasurer Tim Wilson said coalition members were not "wowsers" on gambling but were talking to the government about the reforms.
"Our focus should continue to be how we protect children, particularly around gambling advertising, and making sure that in any negotiation we're getting the best outcome for the Australian people," he said.
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