Do i jump in to legal action
Not as your first or second choice.
Your first approach has failed.
Second step, time to put it in writing. I'd be reminding her that it is illegal to smoke in a car with anyone under 18 for health reasons. Same sort of logic applies to smoking in a house.
Whether you want to go down the next step which is legal action depends on a range of factors including where you both live (same house, other), can you cope having the kids 7 days a week, can you afford it, etc
Hard to give proper advice in a situation like this without discussing all the possible ramifications.