Senior executives from Sportsbet and Tabcorp will be questioned when the inquiry into the government's proposed changes to gambling laws continues on Tuesday.
Cabinet minister Murray Watt defended the federal government's gambling measures following allegations a man had been offered drugs and accommodation by gambling companies in a bid to encourage his addiction.
"For anyone to be offering illegal drugs as an inducement or for any other reason is obviously a crime that should not be committed, and people should pay a price if they're engaging that kind of criminal behaviour," he told ABC Radio.
"This is the strongest package of gambling reform that any government has ever put to the Australian parliament."
Alliance for Gambling Reform chief advocate Tim Costello told the inquiry on Monday he had spoken with a man facing a significant prison sentence for stealing more than $12 million to feed his gambling addiction.
Mr Costello called out the Star Casino, Sportsbet and TAB for facilitating the man's addiction and encouraging him to bet more by providing free accommodation, drugs and bonuses.
In a statement, a Sportsbet spokesperson said the company had no evidence of the allegations made during the inquiry.
The agency said it had zero tolerance for conduct of this nature and urged anyone with evidence to provide it to Sportsbet for investigation.
Responsible Wagering Australia warned of unintended consequences to wagering, racing, sport and broadcasters under the proposed legislation.
The peak body claimed the measures constituted major regulatory intervention that went beyond the government's stated objectives to reduce gambling harms.
It argued a one-hour blackout of advertisements around live sport and the ability to opt-in rather than opt-out of digital ads would be "catastrophic" for sport, media rights and regional activity.
Greens senator Sarah Hanson-Young said there were growing calls from non-government ranks to strengthen the gambling laws.
"Within the coalition there is growing concern that this bill will not protect people," she told ABC Radio.
"This isn't actually about party politics. This is about the vested interests of the gambling companies continuing to be predators on vulnerable Australians and particularly young people."
The Australian Communications and Media Authority, which is responsible for issuing fines to betting companies for breaches of the law, will also give evidence on Tuesday.
Advocates with experience of gambling addiction have criticised Labor's proposed reforms for not going far enough.
Communications Minister Anika Wells said the government's BetStop self-exclusion register was keeping people safe from gambling harms.
