Betting giants Sportsbet and Tabcorp say there is no evidence to substantiate allegations that account managers sourced drugs and sex workers to incentivise vulnerable people to bet more, calling for information about the claims to be provided to regulators.

The anti-gambling campaigners Tim Costello and Luke Bateman used a parliamentary hearing into Labor’s legislation to curb gambling advertising to allege problem gamblers had been supplied with cocaine, alcohol and sex workers, alleging companies exercised no duty of care to their customers.

Bateman, who is now a TikTok star and book influencer, told the inquiry on Monday morning he attended a private Gold Coast event hosted by a gambling company at which senior figures took illicit drugs with clients.

Costello said he was assisting a gambling addict now preparing to plead guilty to the theft of millions of dollars who had been offered drugs, escorts and free accommodation.

Jules Norton Selzer, the director of corporate affairs for Sportsbet, told the inquiry on Tuesday the company had “zero evidence of the allegations”.

“We have no tolerance for that kind of deplorable conduct and information,” he said.

“No information has been provided to us beyond what was referenced yesterday, and we will gladly investigate it.

“Our objective is for adult customers to enjoy our product safely and responsibly, and that is why we continue to support measures to reduce underage exposure and strengthen consumer protections across the range of federal and state regulatory models that we operate within.”

Tabcorp’s head of government affairs, Julian Whealing, said provision of illicit drugs, sex workers and alcohol was not “part of Tabcorp’s customer offering”.

“Tabcorp has zero tolerance for this behavior, we are Australia’s most regulated wagering company, and we take our responsibilities to compliance seriously,” he said.

“Any evidence of this illegal activity should be referred to the relevant authorities.”

Tabcorp has about 800,000 active customers, of which about 400 are classified as VIPs. Whealing estimated about 20 people work as VIP account managers, and Norton Selzer said similar numbers were employed at Sportsbet.

The independent senator David Pocock asked the industry’s lobby group, Responsible Wagering Australia, about a promotion run by betting platform Bet365 in which children as young as 12 were dressed in the company’s branding for a running race.

Chief executive Kai Cantwell said the industry had not always got things right.

“Where we’re presented with cases where we may have got things wrong, we’re quick to act, we understand … we may be on thin ice,” he said.

“We listen to community sentiment … around advertising and promotions, and we are acting, and we have been acting over the past five years.”

The acting prime minister, Richard Marles, said evidence from the inquiry so far had been “quite shocking”.

“Certainly the evidence that was given tells an appalling story,” he said.

“We’ve looked at this issue in detail over a long period of time. There is a balance that has to be struck here, and we intend to reach that balance. But in the process, we’ve engaged in the toughest set of reforms in respect of gambling and gambling advertising that we have seen.”

Jane Hume, the deputy Liberal leader, called the allegations disturbing.

She said the Coalition would talk with Labor and the crossbench about the bill, but would await the committee’s recommendations.

“Getting this legislation right, making sure that we get the balance right, is really important,” Hume said.

“Looking after Australia’s most vulnerable is really important, and clearly, some of these gambling companies have been targeting Australia’s most vulnerable.”