Alongside the teddy bears and plastic tut that are usually offered as prizes at a funfair, trading standards officers found cigarettes being given away.
Twenty five packets with foreign labels were with scratchcards and teddies in machines at the Blackpool Comes to Liverpool funfair in Walton Hall Park, Merseyside.
One dad told the Liverpool Echo: "I was with my two children, who are five and 11.
"My youngest son asked if he could have a go on them.
"There didn't seem to be any signs up about age limits and there was no-one really monitoring who was using them.
"There was definitely no-one checking for ID. I am trying to give up smoking and it's definitely not something I want my children to be interested in."
Gary Baskott from Trading Standards said it was 'unacceptable' and that they would keep checking the machines while the fair was in the city.
Owner Jan de Koning said the find was 'absolutely not something we condone'.
He said: "We run the fair and the rides but the business with the contraband was one of our concessionaires and we weren't aware they were there.
"We do run regular checks but obviously these machines had been missed. The concessionaires were severely reprimanded."
Mr Baskott said: "We seized them as evidence as there were no labels and it was a potential trademark issue, but it's clearly an environment where young people go and there's a potential that young people could get them."
The fair was set up in Walton Hall Park on Thursday and will stay until 26 May.
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