Independent senator Nick Xenophon has accused the clubs industry of trying to frighten politicians with a $20 million campaign against poker machine reforms.
Print, television and radio advertisements are expected to run from Monday as the federal government's gambling advisory committee prepares to release key recommendations.
Poker machine limits could be reduced to $1 from $10, News Limited reports.
Another report from Fairfax Media says Clubs Australia has rejected a government offer to increase ATM limits at licensed venues in exchange for pre-commitments on pokies.
The clubs lobby also rebuffed an offer to grant small pubs and clubs a two-year grace period for bringing in the reforms, the same report said.
Senator Xenophon said Clubs Australia needed to explain why $20 million of its revenue was being spent campaigning against pokie reforms.
"It's pretty obscene that $20 million is probably about the same amount that's spent nationally on frontline problem gambling services," he told the Nine Network on Sunday.
"So they're spending more of this in the campaign to try and frighten politicians."
Labor's minority government hinges on a promise Prime Minister Julia Gillard last year made to independent MP Andrew Wilkie on implementing a mandatory pre-commitment system on poker machines by 2014.
Mr Wilkie has threatened to walk away from backing Labor if legislation isn't passed to make it mandatory for gamblers to carry cards with betting limits.
Complicating the situation are fellow independent MPs.
Rob Oakeshott has told clubs in his NSW north coast electorate that he won't support poker machine reforms if it adversely affects them, although he is yet to declare a political position.
Senator Xenophon is confident Mr Oakeshott will be supportive of a pre-commitment system.
"Rob Oakeshott's a pretty sensible bloke," Senator Xenophon said.
"He knows that you've got to do something that's sensible, that's practical."
Senator Xenophon said pokie reforms were about making a dangerous product safer.
"It's not tenable for any industry, for any business to be relying on something like 40 per cent or more of their revenue from people that are hooked, from people that are vulnerable, that are addicted," he said.
Liberal MP Steven Ciobo said he welcomed Clubs Australia's campaign against Labor's "extreme" pokies pre-commitment plan.
"The Australian public need to be told about this extreme Labor policy because it will cost jobs and close clubs while doing nothing to help problem gamblers," said Mr Ciobo, who is a member of a joint parliamentary committee on gambling reform.
Mr Ciobo said forcing people to hand over their personal details and sign up for a licence to punt could actually make problem gambling worse.