Hong Kong authorities have proposed tightening the regulation of claw machine shops by implementing a licensing regime to curb addiction risks.

The Home and Youth Affairs Bureau’s proposal, included in a document submitted to the Legislative Council (LegCo) on Monday, comes as claw machine shops proliferate in the city as a low-maintenance business opportunity.

“Since these activities may involve gaming elements or addiction risks, appropriate restrictions on format or content may be necessary to protect participants, especially youth, from physical or mental harm or significant financial loss,” the bureau said.

The government seeks to introduce new requirements, such as posting a notice indicating that devices are licensed. The bureau is also considering mandatory addiction warning labels on machines.

A list of licensed premises has also been uploaded to the Home Affairs Department’s Office of the Licensing Authority, the document read.

The tightened regulations will function under the city’s Gambling Ordinance, which currently stipulates that claw machine shops must hold an Amusement With Prizes Licence (AWPL). Before that licence can be granted, a venue must hold a public entertainment licence.

However, a 2022 High Court ruling determined that claw machines do not meet the definition of “entertainment” and thus do not require a public entertainment licence, creating a regulatory gap.

The bureau is proposing to remove the requirement for a public entertainment licence and allow the Home Affairs Department to issue AWPLs directly.

Prize caps, addiction risks

Speaking on an RTHK programme, lawmaker Vincent Cheng said he agreed with the government’s proposal in principle but asked the authorities to consider whether the new curbs would stamp out the business.

“We have to consider whether [the regulation] will affect the industry’s development,” he said, urging the government to “strike a balance.”

Lawmaker Bill Tang, who chairs the LegCo Panel on Home Affairs, Culture and Sports, welcomed the tightened regulations, saying that some claw machine operations had “evolved” beyond their original leisurely purpose.

Prizes in certain machines now include high-value items such as mobile phones, encouraging gambling behaviour, Tang said. He proposed a HK$5 limit on the fee for each game and that the value of each prize be capped at HK$300.

The bureau has also proposed to regulate internet cafes, moving away from a Code of Practice model and introducing a mandatory licensing system.

One option is to bring internet cafes in line with the regulatory regime for traditional gaming arcades, imposing strict age restrictions for adult- or children-only venues and a ban on students in school uniform.

Another model would be to allow cafes to operate if they meet strict safety conditions.

The proposals are scheduled to be discussed at the legislature on Monday.