Australian gambling critics are up on their toes after a virtual poker machine game has been named as the country's highest-grossing phone and tablet app.

Independent Senator Nick Xenophon has jumped on the gun and said he will file for legislation to correct the current system that permits gambling apps to escape classification. This move could possibly terminate the online gambling gap as well as prevent further introduction of similar games.

"The government has known for a long time that there is a serious issue here that needs action, but instead it is still sitting on the fence. That's why this legislation is urgently needed," Senator Xenophon said in a statement.

The highly controversial phone and tablet app that is in the hot seat is the Slotomania, owned by Playtika LTD, a subsidiary of the casino company Caesars Entertainment Corporation. Although free to download, the game charges players between $2 and $21 for in-game coins.

Rated 12+ on the iTunes store for 'Frequent/Intense Simulated Gambling,' it bears the same features of actual poker machines. Its gamers, who happen to be mostly Australian children, need to use real money to buy credits to use the game.

The game got exempt from Australia's Interactive Gambling Act because the credits or "winnings" can't be cashed out.

But Dr Charles Livingstone, a gambling expert, said the app is "habituating the children to electronic gambling, particularly pokie machines."

"They are in a sense preparing kids to find gambling, particularly slot machine or poker machine gambling, an attractive form," he said.

"It's hard for governments to act when these things emerge but I do think that it is an important priority that they act to ensure that young people do not have access to games which mimic existing gambling opportunities and which have the potential to create a whole new generation of gambling-dependent young folk."

The independent South Australian senator will introduce the legislation in February when federal parliament resumes.