Producers on the original movie, in addition to its two studios Dimension Films and Miramax, have contracted various writers to begin working on a follow-up to the 2003 comedy, the Los Angeles Times reports.
The studios also allegedly hope that by hiring a number of different writers, they will be able to pick their favourite script or potentially develop two new films to complete a Bad Santa trilogy.
Bad Santa stars Billy Bob Thornton as a conman that poses as Santa Claus to rob a department store.
In March, it was reported that Thornton was in talks to reprise his role as Willie in a sequel to Bad Santa. The actor previously said that he would be interested in returning for the follow-up.
Thornton's estranged daughter Amanda Brumfield was recently found guilty of manslaughter in the October 2008 death of 1-year-old Olivia Madison Garcia.