The Chinese Temples Ordinance was promulgated by the British colonial government in Hong Kong to address the alarming growth of “pseudo-religious establishments” exploiting the ignorant masses of uneducated Chinese residents. This article critically examines the ordinance and the 2015 proposed amendments as a case study of the potential pitfalls in state responses to religious fraud. First, this article demonstrates the discriminatory nature of the ordinance, which perceived Chinese religions as particularly prone to fraudulent practices and deserving of specific regulatory controls that are not applicable to any other religions. Tellingly, this discriminatory approach—while unconstitutional and undesirable—continues to underpin the proposed reform. Second, this article delineates the conceptual distinctions within religious fraud and the interaction dynamics between religious donors and recipients and argues that the government-sanctioned registration scheme under the ordinance is neither justified nor appropriate to address religious fraud premised on promises of divine intervention in exchange for financial contributions.