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.

Hong Kong’s consumer watchdog has urged claw machine operators to exercise greater transparency amid a surge in complaints over the past two years.

The Consumer Council said on Monday that the number of complaints related to claw machines had surged nearly nine times over two years, from 16 cases in 2023 to 138 in 2025.

“The complaints revealed that some machines displayed or positioned prizes in a way that was prone to misunderstanding; machine settings and gameplay explanations were unclear; and prize quality varied significantly,” the watchdog said.

Citing a complaint, the watchdog said a customer successfully grabbed a box after attempting 40 times and spending around HK$200 – only to discover it was empty.

The shop owner refused to provide a refund, saying the box was displayed only for decorative purposes and was not a prize. After the customer complained to the council, the owner apologised to the complainant and fully refunded the HK$200.

At another shop, a player reported that the claw machine automatically dropped the toy when it reached the top of the machine, preventing it from being delivered to the prize chute. Suspecting that the company had rigged the machines, he lodged a complaint.

“The Council urges claw machine operators to enhance transparency by clearly displaying, on the machine or in a conspicuous location, the charges, gameplay, mechanisms and winning conditions, as well as the contact details of the responsible person,” it said.

It also called on operators to avoid setting an excessive or unreasonable level of difficulty, “which could undermine consumer rights or create negative perceptions.”

The watchdog also advised customers to read the rules carefully and to carefully check the quality of prizes.

They should stop playing and contact staff members if they observe any abnormal settings, it added. If no employees are on site, customers can take videos of gameplay as evidence.

“Whether a prize can be clawed out is influenced not only by machine settings and prize placement, but also by skill and luck. Consumers should weigh expected expenditure against the value of the prize to avoid over‑consumption or addiction,” it added.

The council’s statement comes as the government moves to regulate claw and pinball machines by implementing a licensing regime.

The Home and Youth Affairs Bureau said in a proposal to the Legislative Council last month that the low-maintenance business opportunity, which involves gambling elements or addiction risks, may need to be subject to restrictions to protect players.