Former Melbourne star and reformed gambling addict Schwarz told Fox Sports' Open Mike program last month that the AFL's financial partnerships with betting agencies troubled him, with his biggest concern the way "corporate bookmakers are grooming kids into gambling".
Demetriou told reporters on Tuesday he understood Schwarz's concerns but did not think his comments were fair.
"I have been at pains to say that if the AFL wasn't involved with gambling agencies, there would still be betting," Demetriou said.
"The reason we are involved with gambling agencies is not for the revenue, it's so we've got access to information to protect the integrity of the code."
Demetriou said the AFL's partnerships with betting agencies gave it legal access to those agencies' betting records, which had helped them catch football industry employees betting on games in contravention of an AFL ban.
The AFL's right under those partnerships to veto certain bet types also helped it protect the game's integrity, Demetriou said.
"If David calls that (being) drunk, I call that being responsible," Demetriou said.
Demetriou's comments follow the decision of the South Australian government last week to instigate a ban of live betting odds during sports broadcasts.
Demetriou suspected other states might follow South Australia's lead, but said the AFL had already responded to a Federal Government request that sporting codes self-regulate their relationships with betting agencies.
Demetriou said the AFL's self-regulation had included banning live odds being shown at venues or discussed on television broadcasts during play.
"I think we've taken this issue very seriously. What governments do from here on in is up to them, we'll abide by whatever government decisions there are," he said.
The AFL's national online schools tipping competition recently featured an advertisement from the TAB but Demetriou said that had been a technical error by the AFL's website partner Telstra which was being rectified.
Demetriou was speaking at the launch of the AFL's Indigenous Programs partnership with Coles.
The partnership will cover existing programs for under-15 indigenous boys such as the National Kickstart Championships, Flying Boomerangs and state camps, but will also be expanded to include camps and national championships for under-18 indigenous girls.
"The fact that we've now broadened it to include females is even more important and significant," Demetriou said.
Nick Bowen is a reporter with AFL.com.au. Follow him on Twitter: @AFL_Nick
