AFL champion Eddie Betts has posted security camera footage of a vile racist attack outside his Melbourne home, while his children were playing basketball in their yard. 

The Crows and Blues legend posted the footage on Instagram, showing a car slowly driving down the street outside the home before someone in the car yells the N-word four times as they pass. 

A second angle of the footage shows children playing in the yard as the attack happens.

Police confirmed they have received a report and are investigating.

"Aboriginal kids deserve to be able to play safely, free from racism and abuse over the fence," Betts wrote on the post.

"We are not even safe in our own homes. If you know who this is please let them know that I'm open to having a chat about how much this hurts our kids."

Betts, a fan favourite who played 350 games across a 16-year career, has been the target of racism in the past, including having a banana thrown at him from the crowd during a match in 2016. 

ABC presenter and former Adelaide footballer Tony Armstrong said on News Breakfast he was upset but not shocked by the attack.

"We talk about shock, horror, all this kind of stuff. I'm not shocked. I'm not shocked that it's happening," Armstrong said.

"I'm more disappointed that people think that this doesn't happen and that this is out of the blue.

Armstrong said the footage of the children running from the backyard was particularly harrowing.

"This is in the home," he said.

"This is in the home, over the fence and we saw the reaction of the kids. Running inside. You're telling me they don't have PTSD?"

Armstrong said Betts, who is known for trying to educate people who make racist remarks, was well within in his rights to be furious.

"[If Betts was to express anger] there are people who will sit here going 'why is he reacting like that? He's got to be the bigger person'. He's had bananas thrown at him and he still fronts up," Armstrong said.

"He wants to extend the olive branch. He's always the one who is taking the higher ground and he's well within his rights to go, nah, that's enough."

In a follow up post on Instagram, Betts wrote a message thanking everyone for their support, accompanied by a video of his kids playing basketball.

"It's not going to stop the kids from playing ball," he wrote.

Carlton put out a statement supporting Betts, who played 184 games for the Blues, kicking 290 goals.

The club described the footage released by Betts as "devastating" and "confronting".

"Eddie's courage to once again not only call out such vile and disgusting behaviour, but also offer to educate the person responsible, is a testament to his qualities as a person and a leader of his community," the Blues said in the statement.

"It is the responsibility of all of us to follow Eddie's example, to ensure we do everything possible to stamp out racism, in all its forms." 

Victorian Premier Jacinta Allan described the footage as "sickening" and said it must have "painful" for the Betts family to experience.

"It is sickening and disgusting that kids playing basketball in their own backyard have to be subject to such disgusting racial abuse," she said.

"My thoughts go to Eddie and his family at this time. He has talked a lot about his own personal experience with racism and he has been a strong and proud Indigenous man."

Allan also issued a message to those responsible for the abuse – "leave them alone".

"I would say to the individuals who have done this behaviour, there is no place for this sort of sickening behaviour in Victoria. Let kids be kids, let kids play in their own backyard," she said.

In a joint statement, the AFL's Andrew Dillon and Tanya Hosch said they had reached out to the Betts family to offer their support.

"Once again we find ourselves in a position where we must express our strongest condemnation against another example of overt racism, this time targeting children playing sport in their own front yard," the statement said.

"We acknowledge the leadership of Eddie Betts for bringing this to national attention. Racism is wrong. Racism is harmful. Racism requires a response.

"The AFL takes this opportunity to remind everyone at all levels of the game, that racist behaviour is never welcome. Anywhere.

"We invite everyone to follow Eddie's example in calling out racism when you hear, read or see it. We invite everyone to report racism wherever possible.

Victoria Police said they were investigating the matter, which took place about 8:30pm on Thursday night.

"Victoria Police take these matters very seriously," a statement read.

"Crimes motivated by prejudice cause serious harm to victims, often leaving them, and their communities, feeling vulnerable, threatened and isolated.

"Victoria Police do not tolerate violence, including that which is motivated by prejudice, racism or discrimination.

"People who experience or witness crimes or incidents motivated by prejudice should report them to police at their local police station."

ABC