The number of people gambling has steadily decreased over the past 15 years, but gambling harm and problem betting rates haven't reduced, meaning a larger proportion of people who gamble do so in riskier ways.
Online gambling has more than quadrupled to cover more than 33 per cent of adults since 2017, according to research out of ANU.
Almost one-in-20 adults bet at risky levels in the past year.
People who reported risky and high-frequency gambling were more likely to be experiencing high psychological distress and loneliness.
"These people who experience harms are more likely to be in the lower socio-economic groups, more likely to be unemployed and have a lower income," report author Aino Suomi told AAP.
"For the first time ever, in this data we can see it's also people with kids, so parents are more likely to experience gambling harm from their own gambling."
Lotteries remained the most popular form of gambling, followed by raffles but there has been a decrease in both over the past year.
But there has been a spike in problem gambling due to the prevalence of online gambling, including the ease of access through sports betting apps, Dr Suomi said.
"It's the online gambling that is really driving risky gambling and it's bringing gambling into family homes with kids," she said.
"It's allowing that continuous play, you always have that device with you, it's really difficult to stop if you want to stop."
There are also concerns about the prevalence of sports betting advertising and betting inducements offered to keep people betting.
Australians turning 18 are the first generation who have been bombarded by gambling advertising for their entire lives, Dr Suomi said.
"Although many of the inducements are now banned, gambling companies come up with new ways of targeting these audiences," she said.
"We have to put more effort into regulating online gambling harm."
Grassroots Labor members are putting pressure on the federal government to enact gambling reform after it has dragged its feet on responding to a landmark gambling harm report for more than two years.
The parliamentary inquiry's report, spearheaded by late Labor MP Peta Murphy, recommended a phase out of online gambling advertising and banning betting inducements.
The government is yet to respond to the report, but Communications Minister Anika Wells has flagged a willingness to reveal reforms in the coming months, according to stakeholders.
Unions NSW secretary and Labor for Gambling Reform convenor Mark Morey said the spike in online gambling highlighted the need to fully implement the Murphy report's recommendations.
"Young people are accessing online gaming from an early age and that makes them more predisposed to addiction when they get older," he told AAP.
Mr Morey accused the government of being too scared of the gambling lobby to act as he called for a collaborative, bipartisan approach between Labor and the coalition so wagering companies couldn't split them on policy.
Greens senator Sarah Hanson-Young is pushing for a review into gambling harms in the upper house when parliament resumes to pressure the government to act.
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