I wouldn't threaten my kids with Santa coming. To be honest, I think that's where people go wrong. Why on earth would your kids respect you if you threaten them with others punishing them/correcting their behaviour, and not their own parents??

If I was your SIL I'd start putting some stricter day to day "rules" in place. Don't speak to your parents disrespectfully. Don't speak to your siblings disrespectfully. Don't treat your house/toys/whatever disrespectfully. If you threaten something, then follow through. Every single day. I endured my nephews on Christmas Day. Behaviour that went on a scale from poor to downright disgusting - one of my nephews in particular is without question one of the most revolting children I have ever had the misfortune to come across. His biggest problem is the adults in his life. They're supposed to be parents with all that entails. They're not. All kids are different and have different characters that results in some being "better behaved" naturally than others, ie they're quieter, more self contained kids as opposed to the cyclones and tornadoes. Parents are still responsible for teaching those cyclones self control and decent manners.