The club has launched a competition with a betting agency, giving a fan the chance to sit in the coaches box.
Supporters must make a minimum $5 bet in order to go into the draw to win the prize.
Senator Xenophon says the promotion is irresponsible.
"The reason why gambling is regulated, legislated for, is because there's an acknowledgment that harm can be caused. And this sort of thing is very much in your face," he told ABC Local Radio.
"There's a question whether it goes beyond the sorts of things that sports betting agencies are allowed to do."
A national churches group has joined the criticism.
Tim Costello, from the National Churches Gambling Taskforce says the AFL or Collingwood need to apologise for the promotion.
"Suddenly they've heard the community concern about sports betting overtaking football and said we're going to respond and then are offering lures and inducements to open TAB sports betting accounts," he said.
"You can't talk out of both sides of your mouth."
Tags: gambling, federal-government, federal-state-issues, australian-football-league, adelaide-5000, melbourne-3000 First posted June 2, 2011 08:25:00
Bestselling author and ESPN star, Rick Reilly delivers a hilarious, unabashedly fun, and at times, skin-searing tour through some of the world’s most amazing and outrageous sports