Selling, leasing, giving or giving access to copyrighted content without the author's permission is illegal. The copyrights on any movie / game / computer program / music expire 50 years after its creation in Canada, and something like in the 70 years in United States. As long as this amount of time has not been reached, using the games, especially for commercial purpose, could eventually lead to the company being sued. So the only question is : do they have the permission from the authors or companies owning the copyrights of these games.
As pointed out in earlier responses, there's always that question of whether it's going to bring enough attention to lead to legal problems. Maybe not. But in pure theoritical terms, it is not legal if the company selling the arcades does not have a contract with the copyright owners.