Hong Kong Moves to Rein In Claw Machine Boom as Gambling Concerns Grow

Hong Kong is preparing to tighten oversight of claw machine arcades after the sector’s rapid expansion raised concerns about gambling-like behavior, youth participation, and unlicensed prize redemption schemes. The government is now looking to place the machines and other prize-based amusement devices more clearly under the Amusements with Prizes License framework.

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The Home and Youth Affairs Bureau submitted proposals to the Legislative Council on May 5. Changes would include device licensing, the installation of licenses at the entrance of venues, the posting of warnings about addiction, and an examination of licensing fees, which have not changed since 2000.

Regulatory Gaps And Expansion

The current review stems in part from a 2022 High Court ruling that found standard claw machines did not fit the definition of entertainment under the Places of Public Entertainment Ordinance. Because operators previously needed a Places of Public Entertainment License to secure an AWPL, that ruling effectively removed licensing requirements for many claw machine venues.

After that, the market expanded quickly. According to Midland IC&I data cited in local media, the number of claw machine shops in Hong Kong’s 4 major shopping districts, namely Central, Tsim Sha Tsui, Mong Kok, and Causeway Bay, rose from 9 in the first quarter of 2021 to 58 by the third quarter of 2025. The growth was supported by low staffing requirements, remote management systems, and flexible short-term leasing, especially as landlords looked for tenants to fill retail vacancies after the pandemic downturn.

Value of Prizes and Gambling Concerns

Whereas claw machines had typically been regarded as innocuous entertainment, the fact that prizes were becoming more valuable and were regularly resold was something that both regulatory authorities and experts on gambling highlighted. Gamers were reportedly spending large amounts of money in pursuit of highly sought-after anime collectibles, rare cards, and character collectibles, which could be sold for a profit afterward.

According to local media, one dedicated player spent approximately HK$1,000, or $128, per week on attempting to get prizes worth HK$300 to HK$400, or $38 to $51, each. Rare collectibles could reportedly fetch far more. Authorities are also looking at pinball machine-style venues and claw machine operators suspected of offering cash-equivalent rewards through gift redemption systems or private buy-back arrangements.

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Under Hong Kong’s Gambling Ordinance, prize games that effectively allow players to win money or property can fall within the definition of illegal gambling. Legal commentators have also noted that prize credits or points may still count as gambling winnings even when no direct cash payout is made.

Youth Access And New Limits

The government has expressed particular concern about younger players. There is currently no minimum age requirement for entering claw machine venues, and the Consumer Council warned earlier this year that existing gambling laws do not clearly ban minors from simulated gambling-style games. Under the proposed framework, Hong Kong would cap play fees at HK$5, or $0.64, per attempt and prize values at HK$300, or $38.

Comparable controls already exist in several parts of Asia. Singapore caps prize values at SGD100, or $74, while South Korea limits prizes to KRW5,000, or $3.60. Japan also restricts certain prize categories entirely. These proposals aim to establish clear boundaries within an industry that has developed quickly and is now nearer the gambling discussion than ever before.

Wider Regional Response

Other jurisdictions have already taken different approaches. Taiwan, often described as one of the region’s most mature claw machine markets, tightened controls again in October 2024 after its arcade sector grew rapidly from 920 outlets in 2016 to more than 10,000 by 2019. Brunei went further in 2024, banning claw machines nationwide over concerns about gambling elements and possible effects on younger players.

Macao has kept a more permissive stance. Billy Song, president of the Macau Responsible Gaming Association, said claw machines there are treated mainly as skill-based amusement devices as long as prizes cannot be exchanged for cash. In Hong Kong, lawmakers are now weighing whether the proposed licensing regime can control the market without creating too much compliance pressure for operators. The Office of the Licensing Authority had received 53 AWPL applications from pinball machine shop operators by late March, and further discussion is expected later this year.

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Source: Asia Gaming Brief