Laws introduced to parliament on Thursday limit gambling ads on TV to no more than three per hour between 6am and 8.30pm and completely ban it during live sport within those hours.
Athletes and influencers would also be banned from promoting gambling, while ads will be scrapped from stadiums and jerseys on sports players.
But the government has come under fire for not implementing a total ban on the ads, as recommended by late Labor MP Peta Murphy in a report handed down in 2023.
Anthony Albanese said the reforms being introduced went beyond the recommendations made by his former colleague.
"It actually, in some ways, goes further than that report," he told ABC Radio on Friday.
"It deals with issues, such as particularly online, which has expanded substantially, like in other areas of our lives.
"(It) deals with overseas gambling as well. There's not much point cutting down sites in Australia and leaving everything open overseas."
Mr Albanese said the right balance had been struck by the laws.
"I'm not against someone having a punt on a Saturday. What I'm against is problem gambling, which overwhelmingly, by the way, is poker machines, which is of course regulated by the states," he said.
"What we've done is consult over a period of time."
But opposition communications spokeswoman Sarah Henderson said the proposed reforms did not go far enough.
"This bill is undercooked ... we've got a lot of work to do to interrogate the bill. I am concerned and have a number of concerns that it's not strong enough," she told ABC Radio.
"The coalition is very serious about combating the terrible harm caused to so many Australian families by gambling addiction."
The opposition and the crossbench teamed up to the send the laws to be examined by an inquiry, which will report back on August 17.
Independent Senator David Pocock said it was tragic the bill did not implement a total ban.
"How is it that a Labor-chaired committee gave such strong recommendations, and then the prime minister just buckles to the gambling lobby, induces weak legislation, and now we have the Liberal Party saying that it's not strong enough," he told ABC Radio.
"The prime minister is happy for children to see three gambling ads an hour during the day. We would not allow three cigarette ads an hour."
The ACT senator has called for a bolstering of the reform through introducing a national regulator and banning inducements such as bonus bets.
"They are the most damaging part of the whole gambling advertising strategy," he said.
"I will not be part of a parliament that simply allows a prime minister to deliver for the gambling lobby at the expense of our children."
