There used to be a couple places like Pale is describing around my town. They were called Mr. Arcade, where they charged $5 a day and you could play all you wanted. They started off with all arcade machines (set to free play), then added consoles (inside arcade cabinets, with modded controllers). They all shut down due to arcades being completely dead in this country, but not for legal issues. It's not copyright infringement by any means, as you're technically not charging someone to play Mario Kart, you're charging for admission into your store, then letting people play the games and consoles that you legally own. It's just like an internet cafe, only with less acne.