Regulation of claw machine venues in Taiwan

• In recent years, claw machine venues have popped up virtually everywhere in Hong Kong. There are reportedly an estimated 2 500 claw machine venues scattered across the city from shopping centres to core commercial areas.^{1Legend symbol denoting 星島頭條(2025).} Each venue may house several to several hundred machines, either operated solely by the tenant or jointly with third-party claw machine operators.^{2Legend symbol denoting 香港01(2025a).} Some observed that following the High Court's ruling in August 2022 that claw machine venues are not required to hold a public entertainment licence, there has been a rapid expansion of claw machine venues amidst a lacklustre shop-leasing market. Reportedly many of these venues are operating on short-term leases, in long hours and without staff on-site.^{3Legend symbol denoting For example, reportedly the vacancy rate for street-level shops in Hong Kong's four core shopping districts (Central, Tsim Sha Tsui, Mong Kok and Causeway Bay) rose to about 12% in the first quarter of 2025, marking the highest level in 4.5 years. See 香港01(2025b) and 鳳凰秀(2025).} Currently, there is no specific legislation in Hong Kong regulating their operation, including the contents of the prizes and the fees charged for the games.^{4Legend symbol denoting Having said that, claw machine venues remain subject to the Gambling Ordinance, while their trade practices and product descriptions are regulated under the Trade Descriptions Ordinance.}
• With the proliferation of these venues, there are emerging concerns over consumer protection in terms of fairness and information transparency of gameplay, as well as public health risks due to possible addictive behaviour.^{5Legend symbol denoting It has been reported that some claw machine venues offer games solely relying on luck (e.g. by rolling the dice), and even offer cash or expensive prizes to solicit business. See 信報財經新聞(2024).} Growing concerns have prompted public calls for measures to regulate claw machine operations.^{6Legend symbol denoting 無綫新聞(2025) and 香港電台(2024).} The matter has also been brought up by some Legislative Council ("LegCo") Members on various occasions in recent two years.^{7Legend symbol denoting 無綫新聞(2024) and GovHK (2025).}
• As claw machines gain popularity around the world, many places (e.g. the Chinese Mainland, Japan, Singapore, the United Kingdom and the United States) have implemented measures to regulate claw machine venues and operators, addressing matters such as game transparency, prize content, and potential gambling risks/addiction. More specifically in Taiwan, claw machines are required to be classified as "vending machines" in order to operate in general commercial venues, and enhanced regulatory measures (e.g. on game settings and prize content) were introduced in October 2024 to protect consumer rights and foster industry growth. This issue of Essentials first reviews Hong Kong's policy developments, followed by an overview of global regulatory measures and the key features of Taiwan's regulatory approach to claw machines.

• In the past, venue operators of claw machine businesses were required to obtain both Places of Public Entertainment Licence ("PPEL") under the Places of Public Entertainment Ordinance (Cap. 172) and Amusements with Prizes Licence ("AWPL") under the Gambling Ordinance (Cap. 148), and were subject to conditions including: (a) a maximum fee of HK$5 per play; (b) a prohibition on cash prizes; and (c) a cap of HK$300 on the cash value of each prize.^{8Legend symbol denoting Office of the Licensing Authority (2023).} In August 2022, the High Court ruled that ordinary claw machine venues do not fall within the definition of "entertainment" under Schedule 1 to the Places of Public Entertainment Ordinance (e.g. concert, cinematograph, and amusement ride) and since then operators have no longer been required to obtain a PPEL or comply with the licensing conditions.^{9Legend symbol denoting Since the Gambling Ordinance stipulates that an AWPL can only be issued if the venue holds a valid PPEL, claw machine shops are thus no longer required to obtain an AWPL as well following the ruling in August 2022. See 高等法院(2021).}
• The removal of these requirements has lowered market entry barriers and enabled a joint operation model in which venue operators ("場主") rent claw machines to individual machine operators ("台主"), who manage the machines' game settings and prizes.^{10Legend symbol denoting 鳳凰秀(2025) and 新報人(2025).} The proliferation of these claw machine venues, however, has led to some issues. Firstly on operational issues of claw machines, the Consumer Council received a total of 84 complaints in the first half of 2025 (7 cases in 2022), covering matters like pincers automatically loosening in repeated attempts, players successfully grabbing a winning paper slip but not receiving the displayed prize, etc.^{11Consumer Council (2024) and information provided by the Consumer Council at the request of the Research Office.}
• Secondly on prizes, there are concerns over (a) quality and intellectual property ("IP") status of prizes, with 158 reported cases received by the Customs and Excise Department in 2024 regarding suspected false trade descriptions, up from only 16 in 2022;^{12Over the past three years, there were three prosecution and conviction cases involving claw machines offering prizes with a forged trademark. See GovHK (2025).} as well as (b) appropriateness of the prize items, as reportedly there were cases of machines offering electronic cigarettes and adult toys as prizes.^{13東方日報(2024).} Thirdly on gambling and addiction issues, the Office of the Licensing Authority of the Home Affairs Department received 13 cases in total over the past three years involving claw machines with suspected unlawful gambling elements (e.g. using the claw hand of claw machines to play dice-rolling games and offer cash prizes).^{14The cases have been referred to the Hong Kong Police Force ("HKPF") for follow up. However, HKPF does not maintain statistics on claw machine venues suspected of involvement in unlawful gambling, though in November 2024 they for the first time smashed a suspected unlawful gambling establishment operating claw machines for winnings in money in Mong Kok. See GovHK (2025)., 15Besides, some opined that people should be aware when claw machines offer high-value prizes (e.g. game consoles and mobile phones) that significantly exceed playing costs as this may constitute illegal gambling. See The Standard (2024).} Coincidentally, gambling counselling centres have reportedly recorded cases related to claw machine play, with some individuals accumulating debts of up to HK$100,000 to sustain their playing habits.^{16星島頭條(2024).}
• Observers suggested that the figures might underrepresent the extent of the problem. For instance, enforcing IP protections of prizes relies on IP rights holders to identify infringements and assist investigations, yet conceivably few of them would proactively inspect claw machine venues.^{17堅料網(2025).} They also raised that the division of the roles of venue operators and machine operators obscures accountability, while machine operators' legal identity and obligations are unclear.^{18Consumer Council (2024).} Amid these growing concerns, some LegCo Members and stakeholders have called for strengthening regulation of claw machine-related games through the existing licensing regime or a new regime. In reply to a written Question of LegCo in February 2025, the Government stated that it would "continue to keep in view the operation of claw machine venues in the society and consider the regulatory issues concerned".^{19GovHK (2025).}

• Claw machines are regulated to varying extents worldwide and are generally classified as skill-based games rather than gambling. Business operators are usually required to meet specific licence conditions and/or operational requirements. For example, on fair trade practices, in the Chinese Mainland, operators must clearly display the probability range (e.g. guaranteed win once for every 15 or 30 attempts) on any machine that uses probability-based mechanisms to award physical prizes.^{20中華人民共和國中央人民政府(2019).} In Arizona of the United States, operators are prohibited from altering claw machines such that the claw is physically unable to grasp prizes.^{21Arizona State Legislature (2025).}
• On prize quality and content, in Singapore, operators can only offer prizes from a prescribed whitelist (e.g. toys and key chains), while all other items are subject to the police's approval.^{22The Police Regulatory Department of the Singapore Police Force is the licensing authority for claw machines. See Singapore Police Force (2023).} In Japan, prizes such as tobacco products, alcohol, drugs and live animals are explicitly banned.^{23日本アミューズメント産業協会(2022).} On pre-emption of gambling, Singapore has limited the value of prizes to S$100 (HK$584);^{24Singapore Police Force (2023).} and in the United Kingdom, claw machines must not cost more than £1 (HK$10) per play, and the maximum prize value must not exceed £50 (HK$499).^{25Gambling Commission (2021).}

• In 2000, the Taiwan economic affairs authorities ("Taiwan authorities") introduced the Electronic Game Arcade Business Regulation Act, under which claw machines were classified as electronic games and regulated under the arcade regulatory framework.^{26台灣立法機構(2018).} Shortly thereafter in 2002, the Taiwan authorities launched an alternative classification in which claw machines incorporating a guaranteed-win (保夾) feature (to be discussed below) and passing an evaluation on proper operation of machines were designated as "vending machines" (選物販賣機) instead of game machines, allowing operation in general commercial venues rather than licensed electronic game arcades.^{27玉鼎法律事務所(2017).} For such "vending machines" with guaranteed-win feature, players pay for each attempt until their total spending reaches the specified amount, at which point they can continue playing without additional payment until they successfully grab a prize.^{28張𧙗銜(2023) and 台北市商業處(2025).}
• While this new classification pathway could help broaden public access, claw machines remained not so popular, with only 169 venues recorded in 2013.^{29Reportedly, the Taiwan authorities conducted operations against suspected gambling electronic game establishments that also affected claw machine venues to uphold social order. See 十分好傳媒(2018b).} The dramatic expansion only began in 2016 when joint operations between venue operators and machine operators became prevalent, alongside growing variety of prizes that attracted consumers across all age groups, leading to an eight-fold surge of claw machine venues in two years to 7 361 in 2018.^{30Medium (2018) and 胡均立等(2022).} This expansion came with various regulatory challenges, including inappropriate prizes (e.g. live animals and luxury goods), unauthorized machine modifications, and overspending of students.^{31台灣立法機構(2018).}
• In response to these concerns over consumer protection and the healthy development of young people, the Taiwan authorities tightened the regulatory requirements on the vending machines in May 2018, including lowering the guaranteed-win cap from NT$1,990 (HK$498) to NT$790 (HK$198) and mandating that the cap amount be comparable to the prize value.^{32自由時報(2018).} However, compliance issues persisted, prompting the Taiwan authorities to issue the Directions for the Management of Claw Machine Business (《自助選物販賣事業管理規範》) in October 2024 to strengthen the requirements on claw machine venue operators, given their primary responsibility for venue management.^{33台灣經濟部(2024) and 台南市政府全球資訊網(未註明日期).}
• Key regulatory requirements under the Directions for the Management of Claw Machine Business include:
  • (a)
    No unauthorized modifications: Claw machines are prohibited from adding obstacles, partitions, magnets, dice tables, or other unauthorized changes;
  • (b)
    Guaranteed-win feature: The amount for guaranteed retrieval is capped at NT$990 (HK$248);
  • (c)
    Prize restrictions: Prizes must meet labelling requirements and any applicable safety standards (such as for food or cosmetics). They cannot be cash, jewellery, tobacco, alcohol, adult products, live animals, weapons or items with uncertain content;
  • (d)
    Restricted trade practices: Venue operators are prohibited to (i) place substitute items for grabbing without displaying actual prize products; (ii) buy back prizes with money; and (iii) offer games of chance as prizes;
  • (e)
    Mandatory display of information at venues: Requirements include contact information of venue operators and machine operators, machine specifications, evaluation certificates and responsible gaming warnings, and a clear notice when closed circuit television cameras are installed; and
  • (f)
    Location restrictions: Venues must be located at least 50 metres from primary and secondary schools.
• Individual cities are responsible for implementing these requirements, and they may enact their own legislation to address local needs. For example, Taipei city conducts monthly inspections to track violations, and first-time unauthorized modifications can result in fines of NT6,000 (HK$1,500) to NT20,000 (HK$5,000).^{34台北市商業處(2025) and 台北市法規查詢系統(2020).} Meanwhile, New Taipei city restricts claw machine venues in residential areas from operating between 10:00 pm and 8:00 am unless venue operators obtain written approval from relevant authority.^{35In order to obtain the approval, the operators have to submit a nighttime management plan which includes nighttime management personnel being stationed or arriving within 30 minutes upon contact. See 新北市政府經濟發展局(2023).}
• Policy effectiveness: The enhanced regulations have not slowed the industry's growth and appear to have gained broad acceptance. As at end-2024, there were 10 474 claw machine venues, representing 42.3% growth from 2018.^{36台灣財政部統計處(2025a).} Different from Hong Kong, venue operators in Taiwan are required to pay amusement tax.^{37台灣財政部稅務入口網(2023).} In 2024, such tax revenue contributed NT$466 million (HK$117 million), accounting for 22.3% of the total amusement tax.^{38Other sectors contributing to amusement tax include golf courses, karaoke ("KTV") establishments and amusement parks. See 台灣財政部統計處(2025a).} Nonetheless, irregularities persist in some cities. For example, in Taichung, inspectors examined 964 machines in the first half of 2025 and found over half (52.9%) with product-labelling violations.^{39中時新聞網(2025).}

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