Independent senator Nick Xenophon will press parliament to approve a plebiscite for tough action on problem gambling.
The anti-pokies campaigner wants to impose a maximum $1 limit on individual bets and limit losses to $120 an hour.
"The only way to bypass the power of the poker machine lobby is to go directly to the people," he told reporters in Canberra on Wednesday.
The Abbott government is seeking to repeal Labor laws aimed at curbing problem gambling.
Labor has offered qualified support for the move, but is keen to see voluntary pre-commitment measures introduced across gambling venues.
Senator Xenophon said both Labor and the coalition had abandoned gambling reforms favoured by more than 80 per cent of Australians.
"The plebiscite lever is the only lever that is left," he said, adding there was a bipartisan conspiracy to deny significant poker machine reform.
Greens senator Richard Di Natale said the issue was a story of betrayal, hypocrisy and cowardice.
"This is a government in bed with the pokies lobby, in receipt of hundreds of thousands of dollars," he said.
Senator Di Natale was "gobsmacked" Labor was reversing the position it held in government.
"Why? Because they are cowards," he said.
